Shares in Marks and Spencer hit a ten-year high of 698p yesterday after the retailer reported a 32% increase in half-year pre-tax profit.

Half-year group sales to 30 September rose 11% to £3.929bn on pre-tax profit up 32.2% at £405.1m, while second-quarter like-for-like food sales rose 4.7%.

Analysts upgraded profit forecasts for the year to March 2007 by £20m to £940m, but remained cautious of M&S's long-term outlook.

“A lot of what is supposed to be driving further growth has been tried before and failed, such as big expansion targets, more space in city centres and stretching the brand,” Philip Dorgan, an analyst at Panmure Gordon, told the Independent.

“It's not absolutely guaranteed to fall on its face, but there is a lack of reality about the market's reaction,” added Credit Suisse analyst Tony Shiret.