UK retailers cut orders with suppliers at the fastest rate in more than four decades in September, according to a closely watched business survey that pointed to weakening confidence ahead of the Autumn Budget.

The Confederation of British Industry said its measure of retail orders fell to a weighted balance of minus 62 per cent in September, from minus 29 per cent in August, the weakest reading since the survey began in 1983.

Retail sales volumes also declined sharply, with the balance dropping to minus 55 per cent from minus 48 per cent the previous month. Retailers expect sales to continue falling in October, although at a slower rate.

Online retailers reported particularly weak conditions. The balance for internet sales fell to minus 68 per cent, from minus 43 per cent in August, marking the fastest contraction since October 2023. Businesses expect the decline to continue at the same pace next month.

The CBI figures contrast with recent official data suggesting consumer spending on goods has proved more resilient.

Retail sales volumes in Great Britain rose 0.5 per cent in August, according to the Office for National Statistics, reversing a 0.5 per cent fall in July. Volumes were 2.4 per cent higher than a year earlier and increased 0.9 per cent in the three months to August compared with the previous three months.

Online spending also increased 2.5 per cent between July and August and was 8.9 per cent higher than a year earlier. Online purchases accounted for 28.8 per cent of total retail spending.

The CBI survey and ONS figures use different methodologies and cover different periods, meaning they are not directly comparable. The CBI's latest findings nevertheless suggest retailers have become more cautious about future demand.

Martin Sartorius, lead economist at the CBI, said some companies blamed the deterioration on “poor consumer sentiment”, adding that the prolonged downturn had prompted businesses to reduce orders sharply.

Weakness extended beyond retail. The CBI said wholesale sales fell at a faster rate in September, while motor traders also reported a strong contraction.

The business group urged the government to use the Autumn Budget to reduce employer national insurance contributions and reform business rates, arguing that lower costs would give retailers more scope to invest and hire.