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Last Updated: Tuesday, 6 November 2007, 11:10 GMT
Interest rates 'hit retail sales'
Shoppers in the High Street
Retailers are keen to bag some early Christmas success
UK retail sales growth rose 1% year on year in October, their weakest growth since November 2006, figures from the British Retail Consortium (BRC) show.

Director general Kevin Hawkins put the weak data down to the effect of "higher mortgage interest rates and other pressures" on household incomes.

But food and drink sales grew, aided by Halloween, religious festivals and Rugby World Cup sales opportunities.

Meanwhile, the three-month growth rate fell to 2.0% from 2.1% in September.

Total sales, which include growth in retail floor space, were up 3% on the year and 3.9% across the three-month period.


Despite that, experts continue to warn that recent credit market worries and high interest rates could lead consumers to tighten their purse strings further.

"It points to some challenging trading conditions for many retailers in the run-up to Christmas, which are likely to persist until interest rates are reduced and consumer confidence begins to improve," said Mr Hawkins.

And the BRC report also said that by cutting Christmas food prices early, retailers were already fighting to provide value for money.

'Big ticket' caution

The mild weather also hit clothing and footwear sales in October.

Furniture and homeware sales slowed, but health and beauty items "held up well".

And consumers were more and more cautious about making major household purchases, the BRC said.

The report comes a week after the business body, the CBI, said growth in sales on the High Street was continuing to slow as retailers started to feel the pinch.

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