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The drier weather in August failed to lift spirits on the high street to any great degree, with interest rate rises continuing to cloud consumer confidence, according to new figures released today.

UK retail sales rose by 1.8 per cent on a like-for-like basis last month, the latest research by the British Retail Consortium (BRC) shows.

Although the rise marks an improvement on the 1.2 per cent rise recorded in July, when bad weather conditions led consumers to shun the shops, August's increase still marks the second weakest monthly performance this year.

The BRC said that while sunnier weekend weather helped food, clothing and footwear sales last month, growth remained weaker than earlier in the year.

However, providers of children's clothing and footwear failed to benefit from a back to school bounce, with heavy competition and price focus in the sector sending such retailers to the bottom of the class.

Furniture and homeware sales also fell back after gains made in June and July as a result of heavy discounting, the BRC said.

On a three-month basis the figures released today show that like-for-like growth in the retail sector remained unchanged at 2.1 per cent between June and August, while total sales slipped from 4.1 per cent to 4.0 per cent over the quarter.

The BRC said that with consumer confidence knocked by a series of interest rate rises, shoppers were cautious about making big purchases, with heavy discounting often necessary to persuade them to part with their cash.

Over the past year the Bank of England has raised interest rates five times in a bid to stem inflation.

Commenting on August's weak retail figures, BRC director general Kevin Hawkins said there was "no case for another hike in interest rates".

"The arrival of drier, if not warmer, weather has had little effect on retail sales," explained Mr Hawkins.

"The squeeze on disposable incomes, reinforced by worries about interest rates, is depressing both retail sales and shop prices," he added.

Nonetheless, analysts are predicting that monetary policymakers will opt to keep the benchmark rate of interest on hold at 5.75 per cent when they meet on Thursday. Economists say that ongoing uncertainty within the world's financial markets and July's surprise drop in inflation, which fell below the Bank of England's two per cent target that month, mean that there is no case for raising the cost of borrowing at the present time.