Shoppers hold onto money in face of cuts

The 0.2 per cent decline announced by the Office for National Statistics represented a second unexpected monthly decline in sales, after volumes dropped 0.5 per cent in August.

The figures come amid warnings from retailers over the impact Chancellor George Osborne's belt tightening would have on the high street.

Howard Archer, chief UK economist at IHS Global Insight, said: "The second successive fall in retail sales in September is surprising and particularly worrying given the importance of consumer spending to the economy."

Major high street players, such as Debenhams and Argos-owner Home Retail, have raised concerns over the impact that the cuts and pending VAT rise will have on spending.