Unexpected fall in retail sales

The World Cup gave a boost to electrical sales in June

Retail sales suffered an unexpected fall in July, figures from the Office for National Statistics show.

UK High Street sales volumes fell 0.3% during the month, compared with forecasts of a rise of 0.2%.

A drop in electrical sales following the world cup was one of the main factors behind the fall.

But the annual rate of sales growth actually rose by 4% when compared to the same period last year, which was affected by the London bombings.

Most of this growth was driven by discounted prices - with price tags an average of 0.5% lower than at the same time last year.

Falling sales of household goods were largely behind the slowdown in July, with volumes down 3.4% as sales of flat-screen TVs tailed off following the end of World Cup football tournament.

Rates question

Experts suggested the figures could dissuade the Bank of England from raising rates in coming months.

Minutes published on Wednesday by the Bank's rates-setting Monetary Policy Committee suggested members planned keep a close eye on consumer spending in coming months.

Global Insight chief economist Howard Archer said the latest sales figures "revived doubts" about the strength of consumer spending, particularly in the light of rising fuel and household bills.

"While record high employment will provide some support, we believe that consumer spending is likely to be relatively muted over the coming months as the recent interest rate hike adds to the significant headwinds already facing the consumer," he added.

"As a result, we believe that the Bank of England may well hold off from any further interest rate increases until next year. "