Retail sales jumped unexpectedly in August, rising by 1.2 per cent on the back of strong sales of clothes and shoes.

Clothes stores saw the volume of sales surge by 4.1 per cent during the month to stand 8.8 per cent higher than August last year, official figures showed.

But analysts warned that monthly sales figures are highly volatile. Total retail sales in the three months to August were 0.8 per cent lower than the three months to July.

Supermarkets, where sales have risen so far this year, suffered their first decline in trade since December last year with sales volumes falling by 1.3 per cent in the three months to August, compared with a 0.3 per cent rise in the three months to July.

Last week, the British Retail Consortium indicated that sales had fallen by 1 per cent during August.

Jonathan Loynes, of Capital Economics, said:"These figures are still puzzlingly strong compared to the much gloomier message coming from the retail surveys, consumer confidence figures and anecdotal evidence. As such, we suspect that the Monetary Policy Committee will treat them with a pinch of salt."

Howard Archer, of Global Insight, said the outlook for sales was bleak, despite August's sturdy figures. "Consumers are being hit left, right and centre by increasingly rising unemployment, muted disposable income growth, a serious squeeze on purchasing power," he said.

The figures came as Spencer Dale, a member of the Bank of England's rate-setting committee, said that the risks facing the British economy were finely balanced but could change quickly in the current uncertainty. He said he was worried that the current high rate of inflation, which rose to a 16-year high of 4.7 per cent last month, could cause people's expectations for prices rises to increase, and he said the Bank had to guard against that.

However, there were encouraging signs in today’s figures that showed retailers are beginning to cut prices to encourage consumer demand. The retail price deflator — a measure of how high street prices are changing as a whole — dropped from a 10-year high of 1.6 per cent in July to 0.9 per cent in August.

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