Following a surprisingly poor survey in July, the new report suggests that retailers performed rather better this month. That said, although the headline sales balance climbed from minus 43 percent to minus 27 percent, this was a third successive negative print and well short of the market consensus. Moreover, with another sub-zero forecast of minus 17 percent, the CBI expects continued weakness in September.

Taken at face value, the August update suggests that the retail sector is just about keeping its head above water. Actual volume sales have risen only 0.4 percent since February and the third quarter seems to be shaping up to be another period of sluggish demand. Still, today's data leave both the UK RPI and RPI-P at minus 5, close enough to zero to indicate overall economic activity at least running much as expected.

Having slumped in July, the sales balance is expected to improve to minus 15 percent this month.

The Confederation of British Industry (CBI) produces a monthly survey (and a more detailed quarterly report) analysing the performance of the UK retail, wholesale and motor trade sector. Volume sales, orders on suppliers, sales for the time of year and stocks are all covered and the quarterly survey also covers imports, selling prices, numbers employed, investment and business situation. Financial markets tend to concentrate on the CBI's annual sales growth measure as a leading indicator of the official retail sales report.

This survey is a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. The monthly update provides a vital update on volume of sales, orders and stocks. Like the industrial survey, it carries significant weight in the formulation of economic policy at the Bank of England and within government as a highly respected barometer of high street trade. It is considered to be an advance indicator of retail sales although it is not well correlated with the official data on a monthly basis.