The release of better-than-expected UK retail sales figures helped sterling rebound sharply against the euro this morning.

The Confederation of British Industry’s distributive trades balance rose to a reading of 3 this month from -16 in August, matching April’s high. Economists surveyed by Reuters news were expecting, on average, the balance to rise to -14. ‘After such a difficult summer, it is encouraging to see signs that conditions in the retail sector are stabilising,’ said Andy Clarke, chief operating officer of Asda and chairman of the survey panel.

’Grocers and shoe shops are continuing to enjoy solid growth while carmakers are seeing sales volumes hold steady, thanks to the scrappage scheme.’ Separate eurozone data was also encouraging: the EU consumer confidence index rose to a reading of -19 in September from -22 the prior month, economic confidence improved to 82.8 from 80.6 and industrial confidence climbed to -24 from -26. The improvement in confidence bodes well for both consumer and business spending and suggests the eurozone will continue to show further signs of stabilisation