May 20 (Bloomberg) -- U.K. retail sales probably rose in April as soaring house prices and high employment spurred consumers to borrow and spend, a survey of economists showed.

Retail sales probably increased 0.3 percent in April, the 11th month without a decline, after a 0.6 percent advance in March, according to the median forecast of 31 economists surveyed by Bloomberg. From a year earlier, sales may have climbed 6 percent in April, following a 6.4 percent gain the month before.

The U.K. economy has outpaced the 12 euro countries for the past four years as British consumers kept spending. Retailers have enjoyed the longest run without a decline in sales for at least 18 years, according to the government. In Germany and France, unemployment of almost 10 percent has crimped household spending.

``The picture here looks quite bright, retail sales are well supported,'' said Trevor Williams, chief economist at Lloyds TSB Group Plc, before the report. In Europe ``they've got lower levels of employment and are less confident about their future.''

April's retail sales figures will be released by the Office for National Statistics in London at 9:30 a.m.

The Bank of England has raised interest rates three times since November to 4.25 percent, the highest in 2 1/2 years. Consumers have shown little reaction as low unemployment and rising house values have propelled spending.

Houses, Jobs

House prices have climbed almost 20 percent in the past 12 months, according to HBOS Plc, Britain's largest mortgage lender. Employment is at a record while the jobless rate is the lowest of the Group of Seven most industrialized nations.

Stores including Next Plc are benefiting from stronger household consumption. Britain's third-largest clothes retailer last week said sales rose 16 percent in the first 14 weeks of the year. Tesco Plc, the U.K.'s largest retailer, yesterday said it will expand its workforce by 6 percent this year.

``I don't see any good reason for consumer spending to slow,'' said Nick Kounis, an economist at Fortis Bank NV. ``Demand is going to remain quite buoyant in the near term.''

In Germany, retail sales fell 0.5 percent in March while French consumer spending has declined for the past two months as unemployment fails to improve. The euro area's 8 percent jobless rate compares with a 4.7 percent level in the U.K.

The U.K. economy grew 2.2 percent in 2003 and may grow 3.6 percent this year, the Bank of England predicts. The central bank says faster growth will stoke inflation and make further increases in borrowing costs necessary. Consumer prices increased 1.2 percent in the year to April, accelerating from March's 1.1 percent, the slowest pace in nine months, the government said this week.

To contact the reporter on this story: Duncan Hooper in London at dhooper@bloomberg.net.

Last Updated: May 19, 2004 19:16 EDT