Woolworths has reported narrowing half-year losses but warns that it remains “cautious” of the retail environment.

The high street retailer reported a pre-tax loss before exceptional items of £64.7m for the six months to 4 August, down from £73.6m last year, on sales up 16.1% to £1.14bn. Like-for-like sales edged up 0.6%.

“The recent rise in interest rates and uncertainty surrounding the financial markets makes it difficult to predict consumer demand for the key Christmas selling period,” said CEO Trevor Bish-Jones.

“We have planned for our product markets to remain competitive and to keep our costs under control to maintain momentum on our margin delivery,” he added.