(RTTNews) - UK retail sales came in weaker than expected in September as consumers resorted to cautious spending, raising concerns over the recovery in the third quarter.

Thursday, the Office for National Statistics said retail sales volume remained flat on a monthly basis for the second straight month in September. Economists were expecting a monthly growth of 0.5%. Year-on-year, retail sales volume grew 2.4% in September, while expected growth was 2.8%.

“With consumer confidence rising due to better news on the housing market, strengthening equities and a marked slowdown in the rate of deterioration in the labour market we look for stronger retail sales figures in coming months - especially on big ticket items ahead of the hike in VAT,” ING economist James Knightley said. “Nonetheless, with households still paying down debts and looking to save more in an environment of weak income growth the recovery is likely to be slower and less vigorous relative to previous recovery periods.”

Predominantly food store sales increased 2.8% from the previous year, while non-food stores sales grew 1.1%. Within non-food stores, the largest growth was in non-specialized stores, which rose 5.6%. Sales in textile, clothing and footwear stores were up 5.3 %.

The ONS said value of retail sales in September was 1.8% higher than in September 2008. For the three months to September, value climbed 1.8% from the prior year.

The retail sales deflator, a measure tracking shop price changes, showed an annual fall of 0.5% in September versus 0.4% fall in August. The deflator has been negative since June.

In the three months to September, total sales volume was 2.5% higher than the same period a year ago. Sales increased 0.9% during July to September compared to the previous three months.

According to Caroline Newhouse-Cohen, an economist at BNP Paribas, the sustainability of the upward trend in total retail sales mainly depends on how much household desired savings would increase, as economic prospects remain uncertain. Indeed, retail sales trend remains disappointing, the economist said.

The ONS confirmed that consumer confidence is fragile in the UK, the British Retail Consortium said. Retailers will be hoping for positive news about employment and housing to boost consumer sentiment, said BRC economist Richard Lim.

“Given the weakness of the productive sector in the economy, countering the risk of a setback remains the key policy priority.” David Kern, Chief Economist at the British Chambers of Commerce said. “There is clearly a strong case for the Bank of England to reinforce the QE stimulus and to stimulate bank lending.”

Elsewhere, a report from the Bank of England said the flow of net lending to UK businesses remained negative in August. Lending to businesses fell 4.2% year-on-year in August after falling 3.5%in July. That was the fourth straight fall.

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