Surprise rise in UK retail sales

The ONS shopping figures were in stark contrast to recent gloomy reports

UK retail sales unexpectedly jumped in August, figures from the Office for National Statistics (ONS) show.

High street sales rose 1.2% in August to stand 3.3% higher than a year ago. Analysts had expected a 0.5% drop after a swathe of gloomy surveys.

Clothing and shoes sales led the increase - buoyed by back-to-school shopping - but food sales fell 0.2%.

The report flies in the face of reports which predicted consumers would cut back amid the current economic gloom.

Recent surveys from the CBI and British Retail Consortium had painted a considerably darker picture of prospects for retailers.

Gloomy future

They blamed surging inflation, rising costs and bad weather for denting consumer spending, with the CBI branding it a "summer to forget" on the High Street.

But while the monthly and annual ONS figures were positive, sales in the three months to August fell 0.8% compared with the previous three months - the biggest drop since November 1990.

Analysts added that following a raft of bad news from the financial sector, sales were likely to slip back in coming months.

"With consumer confidence plunging in the wake of soaring inflation, falling asset values and rising unemployment the official retail sales will inevitably correct lower," said ING economist James Knightley.