Growth in annual retail sales volumes held up in May but the underlying trend shows that sales growth has eased further as consumer demand falls away.

The survey raises another question mark over the Bank of England's shock decision to increase interest rates by a quarter percentage point to 7.5%.

Shopping baskets are becoming lighter

Sudhir Junankar, CBI's Associate Director of Economic Analysis, said: "Retailers will be encouraged by the steady growth in trade in May, although the results across the sector are patchy.

"However the underlying trend in sales growth is now showing clear signs of easing as trading conditions become increasingly patchy.

"The survey suggests that retailers do not expect their prices to pick up any further, which is good news for the inflation outlook," he added.

Clothing and footwear and leather stores reported the strongest volume growth while off-licences reported a marked downturn in sales as did furniture and carpet retailers.

Conversely an increase in part-time workers saw employment in the retail sector grow at the fastest rate for nearly 10 years.