Sales picked up last month after a poor summer

Overall sales growth increased last month, while like-for-like sales, which exclude newly opened stores, recovered after being virtually flat in August.

However, the British Retail Consortium warned that growth was fragile and that consumers were increasingly cautious.

Higher interest rates and house price concerns had hit confidence, it said.

Changing mood

September was generally a good month for retailers, according to monthly figures from the British Retail Consortium and KPMG.

Overall sales rose 4.6% between 29 August and 2October, outstripping the two previous months.

Like-for-like sales, a crucial measure of retailers' performance, rose 2%, once again an improvement on July and August.

On a three-month rolling scale, overall growth slipped from 4.2% to 4.1%.

There will be no jumping for delight among retailers Kevin Hawkins, British Retail Consortium

However, the retailers' organisation said the figures looked better than they actually were because the period in question included the August bank holiday.

"There will be no jumping for delight among retailers," said BRC director general Kevin Hawkins.

"The rise in interest rates over the last few months, coupled with growing uncertainty over the economy and the housing market, has impacted on the mood of shoppers.

Bouncing back

"The underlying trend remains one of sluggish retail sales growth stemming from consumers who remain resilient but cautious."

Shoppers are showing increasing caution about splashing out on 'big ticket items' such as computers, electrical goods and furniture, the study found.

However, sales of womenswear and footwear were strong.

Helen Dickinson, an economist with KPMG, said sales had held up better than many experts had expected.

"Consumer confidence has taken its share of blows in recent times but just keeps bouncing back," she said.

"Such resilience is crucial...as we are already in the run-up to the most critical trading period of the year."

Despite picking up after a wet summer, the latest figures indicate that five interest rate rises since last November have taken the heat out of the retail market.