British retail sales surged by more than expected last month, adding to signs that the Bank of England may hike rates sooner than had been initially expected.
The volume of sales jumped by 1pc in August compared with the previous month - stronger than economists had been expecting.
But the Office for National Statistics (ONS) warned there were clear signs of rising prices.
"Within this month's retail sales we are seeing strong price increases across all store types compared with a year ago, reflecting wider inflationary pressures," said Kate Davies, ONS senior statistician.
"However, we are still seeing underlying growth in sales volumes, and with strong growth in non-essential purchases as consumers continued to buy more from non-food stores."
Rising inflation has eaten into consumers' disposable income in Britain this year, causing the weakest first quarter for retail sales since 2010, as the fall in the pound after last year's Brexit vote pushed up the cost of the imports.
Uncertainty still reigns amid the Brexit talks and political ructions within Theresa May's Cabinet.
Last week, the Band of England said it was likely to raise interest rates in the coming months if the economy and inflation pressures strengthen as expected.
Expectations of a rate hike have helped strengthen sterling.
However, research published by the Bank of England yesterday suggested that consumers there were tightening their belts. It said households had responded to squeezed incomes by trading down or focusing on essential purchases.
"As a result, demand growth had slowed across a number of consumer-facing sectors, and modest nominal consumer spending growth primarily reflected price inflation," the bank said in its latest summary of monthly reports, which was compiled by the Bank of England's agents between late May and late August.
Retail sales growth had remained subdued in values terms, with volumes falling in several categories including for big-ticket items.
The survey is based on interviews with around 700 companies across the UK.
Economists polled by Reuters said the Bank of England will raise interest rates for the first time in a decade at its next meeting - but a majority added that this would be a mistake, and that it was not the time to hike borrowing costs.