High street shops at most confident in six years

High street sales have soared in August, giving shopkeepers renewed confidence about the coming three months.

A CBI survey today found 53% of retailers saw sales rise in the first two weeks of the month while 18% said they fell. The balance of plus 35 was the strongest since April 2007, a year before the recession started.

Shopkeepers are the most confident they have been since May 2004.

Clothing stores, grocers and durable household goods shops enjoyed the best growth as better weather at the beginning of the month and summer sales boosted demand.

"The emerging slowdown in the wider economy has yet to spread to the high street," said Samuel Tombs at Capital Economics.

There was a further warning on inflationary pressures as retailers reported the fastest pace of price increases since February 1992. Two-thirds said average selling prices were up on a year ago, while 9% said they fell.

Despite the progress, the CBI's head of economic analysis, Lai Wah Co, said it was unclear how long the strong growth would continue.

"The broader outlook for consumer spending is still uncertain, given the VAT rise next year, subdued pay awards and the feed-through of public spending cuts to job losses."