UK shoppers continue to spend despite rising prices

Retail sales rise by more than expected, particularly clothing and footwear, despite squeeze on household budgets

Britain's consumers continued spending after the summer sales, despite the steepest annual growth in non-food store prices in almost three decades.

Growth in retail sales volumes rose by 1% in August after the Office for National Statistics revised the figure for July up to 0.6%, beating analysts' expectations for an increase of 0.2%. The pound leapt against the dollar on the figures, which add weight to a potential rate hike by the Bank of England for the first time in a decade.

Related: UK growth will trail Italy, France and Germany next year, says OECD