German retail sales fall in June

Shoppers are being squeezed by higher fuel and energy prices

German retail sales fell in June as rising energy and food prices ate into shoppers' purchasing power.

Sales fell 1.4% from the previous month and 3.9% compared with June 2007, the Federal Statistical Office said.

It is the latest sign of difficulties facing Europe's biggest economy. Consumer confidence is at a five-year-low, according to the GfK institute.

Data earlier in the week showed that unemployment rose in July and business

confidence was at a three-year-low.

"The outlook remains bleak," said Matthias Rubisch at Commerzbank.

"Soaring energy and food prices are robbing households of their purchasing power," he added.