MARKS & SPENCER saw shares come under pressure once more yesterday as an eighth successive quarter of falling sales in its clothing division highlighted the task ahead in turning trade around.

But the wider London market maintained its bounce back thanks to further signs of economic cheer and as the International Monetary Fund (IMF) hiked its UK growth forecast to 0.9 per cent for the year.

The FTSE 100 Index rose 63 points to 6513.1, a gain of one per cent, following Monday’s 1.2 per cent climb on assurances from central bankers about interest rates being kept as low as possible.

The IMF increased its growth forecast by 0.3 per cent since April, when it downgraded the UK outlook amid warnings over austerity cuts.

Investor sentiment was also boosted as the British Retail Consortium said retail sales rose 1.4 per cent last month, while the latest survey by the Royal Institution of Chartered Surveyors showed optimism over the housing market was at its highest level in at least 14 years.

Craig Erlam, market analyst at Alpari, said sentiment about the improving economic outlook in the US was also helping, reflecting a change in perspective by traders.

Recent months have seen markets spooked by improvements because of fears they could herald an end to the US Federal Reserve’s support for the economy.

Mr Erlam said investors were now more likely to “focus on the positives surrounding the improving economic situation in the US, rather than what it means for quantitative easing”.

But there was some downbeat economic data on the UK manufacturing sector as official figures showed activity unexpectedly fell in May, sending the pound to its lowest level against the US dollar for three years.

Sterling dropped to 1.48 dollars and held firm at 1.16 euros.

Among stocks, M&S slipped nearly two per cent, or 6.5p, to 453.2p, after it posted a 1.6 per cent decline in like-for-like general merchandise sales for the 13 weeks to the end of June.

Royal Bank of Scotland was one of the biggest gainers, up five per cent or 15.6p to 304.4p, after an upgrade by Goldman Sachs as it said a move to split the lender into a good bank and bad bank could be beneficial for shares.