UK retail sales growth slows

Retail sales in June grew at the slowest rate for 18 months, a survey by the Confederation of British Industry (CBI) said.

The figures back up the last set of retail sales data from the government, which showed sales slipping 0.6% in May.

And the findings may interest the Bank of England which is holding its monthly rate-setting meeting this week.

The Bank has come under pressure to raise rates to cool the house price boom, despite few signs of inflationary pressures elsewhere in the economy.

New consumer credit figures released on Wednesday showed a slowdown in the rate of growth of non-mortgage lending, suggesting that people are less willing to borrow to finance their spending.

Consumers more cautious?

"It's clear consumers are becoming less willing to spend," said Alistair Eperon, chairman of the CBI's survey panel.

"Poor weather in the first half of the month and one-off events such as the World Cup and the Golden Jubilee may have kept people out of the shops and exaggerated the effect in June.

"But longer lasting factors such as slowing earnings growth, stock market falls and pensions uncertainty could be making consumers more cautious."

The survey found that compared to sales a year earlier, 45% of firms said sales were higher, while 29% said they were down.

The balance of plus 16% was down on plus 25% in May and plus 57% in April.

The survey found that retailers were still optimistic about sales for the coming months, but noted that with sales continuing to disappoint, retailers were reducing stocks.