FEARS of a tough Christmas for retailers mounted yesterday after official data showed that growth in spending on the High Street has remained at post-war lows.

The Office for National Statistics said cash spent between August and October rose 0.2 per cent on a year earlier - the weakest annual rate since records began more than 50 years ago.

An increase of 0.2 per cent in sales volumes during October was in line with expectations in the City, but marked a decline on the 0.6 per cent growth seen in the previous month.

Statisticians said that while sales are picking up after a period of no growth, retailers appear to be achieving volume growth at the expense of their profit margins.

Prices were on average 1.1 per cent lower than a year earlier, the biggest decline since February.

Paul Clarke, national director of retail and wholesale sectors at Barclays business banking, said: "The High Street is being rewarded for its hard work over the last few months and customers seem to have been tempted by the offers available. Although retailers will welcome this uplift in volumes, profit margins will have been affected by this cost-cutting."

The figures are unlikely to settle the debate about whether the next move in interest rates will be up or down.

"Spending appears to be recovering modestly helped by ongoing deflation. But for retailers and policymakers alike it is the next two months that are critical," said Geoffrey Dicks, economist at RBS Financial Markets.