Although retailers remain unclear over the longer term trends, the BRC believes there is little sign of a downturn in the immediate future.

Jonathan Reynolds, director of OXIRM, said: 'The slow drift down in the retail confidence indicator since the beginning of the year seems to have gone into reverse over the last two months. Investors have seen retailing as something of a safe haven and consumers seem better disposed - although sales growth has yet to reflect this. A worrying sign is that this continues to be at the expense of some retailers' profitability.' For September, the UK RCI stood at 49.4, against the score of 50 it achieved in May. Retail sales growth showed little change, retail shares stood firm and consumer confidence notched up. The only negative factor was retail profitability, dragged down by some individually poor operating results.

BRC director general, Bill Moyes said: 'The pressure on retail profits is proof of intense competition within the sector that continues to provide increased customer value and low inflationary pressure even during periods of positive sales growth. Despite consumer sentiment remaining fragile and subject to rapid change, the City's renewed confidence reflects an efficient industry that continues to outperform other sectors of the economy.'