September 20 2012.

- The volume of retail sales in August 2012: down 0.2% on the month, up 2.7% on the year

- Annual store price inflation remained low, at 0.2% in August 2012

Commenting on the retail sales figures for August, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said: "Many expected the Olympics to have a negative effect on August's retail sales, but the fall was smaller than feared. The annual increase in retail sales over the year of 2.7%, and the positive growth seen in the three-monthly comparison, supports our assessment that GDP is likely to return to positive growth in the third-quarter of this year. However, the pace of any recovery is still too modest, and the UK economy will face a prolonged period of low growth until excessive debt levels are reduced.

"The relatively low level of high street inflation is welcome news since it supports consumer spending when fiscal austerity at home, coupled with the eurozone crisis, continues to exert pressure on the UK economy. Falls in inflation should not be limited, so the MPC must be cautious before looking to any further increases in QE. While official estimates of a recession since the end of last year may be too pessimistic, the economy is stagnating, and growth is far too weak. The government needs to take action, implementing policies that will support growth, empowering private sector businesses to create jobs, invest and export, while the public sector continues to shrink. "