High street sales fall in June
After a surprise 3.6 per cent jump in May, sales fell 3.9 per cent in June, the largest monthly fall on record official figures show.
The annual growth rate fell from 7.9 per cent in May, to 2.2 per cent in June.
Food store sales fell by 3.6 per cent, the largest fall since records began in 1986, while non-food sales decreased by 4.5 per cent, also the largest decrease in the series since 1986.
However, the average weekly value of sales in June was £5.1 billion, 3.4 per cent higher than in June 2007.
Global Insight economist Howard Archer said: "The retail sales data provide yet further evidence of slowing growth but rising price pressures. Critical for interest rate prospects over the coming months is to what extent will likely markedly softening consumer spending dilute the pricing power of companies and retailers?
"Until the Bank of England sees clear evidence that companies pricing power is being undermined, it will be reluctant to cut interest rates."
Capital Economics analyst Vicky Redwood said: "The UK retail sales data are finally looking plausible! The annual growth rate plummeted from 7.9 per cent to 2.2 per cent, leaving it pretty much exactly in line with the rates recently suggested by the CBI and BRC surveys."
However, the weaker consumer demand will reduce the chances of retailers passing on their rising costs and discourage the Bank of England from hiking interest rate rises next month, Ms Redwood added.
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