The retail sales balance in the UK has been solid in August, according to the Confederation of British Industry’s (CBI) latest quarterly Distributive Trades Survey.

The survey revealed that year-on-year (YoY) retail sales grew 37%, which is the fastest in nine months, after declining 4% in July.

Retailers expect the trend to continue next month with growth of 31%.

With growth of 3%, sales volumes were considered broadly ‘average’ in August, and the figure is expected to stay in line with seasonal norms with growth of 1% next month.

Internet sales improved from a 37% fall in July to a 7% fall this month. The figure is expected to remain flat next month with a fall of 3%.

Employment in the retail sector grew 13% during the month, compared to 0% in May, however, retailers plan to cut back on investment in the next 12 months compared to the previous 12 months.

Average selling price inflation in August grew at the fastest pace since 1985, to 87% from 77% in May.

Retailers expect prices to continue rising at a rate of 87% next month.

CBI principal economist Martin Sartorius said: “While retail sales returned to solid growth in the year to August, firms remain pessimistic about their business situation over the next three months – to the greatest extent since the first Covid-19 lockdown in 2020. This gloom is reflected in retailers’ investment intentions, which continue to be resolutely negative.

“Firms now need support from the Government in order to encourage investment and create sustainable growth. Crucially, business rates reform and a more flexible apprenticeship levy will help with dwindling business confidence.”

Recently, the UK’s Office for National Statistics revealed that retail sales volumes in the country increased by 0.3% last month, following a 0.2% fall in June.