Surprise as high street sales jump

The CBI's distributive trades survey for September showed unexpected strength as the balance of retailers reporting that sales were up year-on-year climbed to a six-year high at plus 49 per cent, compared with plus 39 per cent in August.

It was the third consecutive increase and followed a decent month for clothing and footwear sales in particular, the business lobby group said.

Retailers also expect sales to be strong next month, but economists warned consumers are likely to find life much harder going forward as the public spending squeeze and rising food prices weigh on sentiment.

The official measure of retail sales also showed a much weaker picture during August.

Separate figures revealed a fall in the UK's savings ratio as households dipped into reserves to finance a pick-up in spending between April and June.

In an interview on Monday, the deputy governor of the Bank of England said savers should be ready to "eat into" their funds to help them through the current period of low interest rates.