Volume retail sales growth worst for six years

Retail sales volumes for the three months to July were up 1.3 per cent, compared with last year, according to the Office for National Statistics. This is the lowest annual growth since February 1999. Quarter-on-quarter, the period was up 0.7 per cent on the previous three months, the highest growth since November last year.

July volumes decreased by 0.3 per cent compared with June, which experienced a 1.2 per cent growth month on month.

Analyst Ernst & Young noted that household goods retailers and department stores are bearing the brunt of the decline, while food retailers remain relatively resilient.

Ernst & Young head of retail Tim Sleep said: 'Looking ahead, the impact of the recent interest rate cut will offer some limited relief to retailers, but it is clearly not enough to reverse the sector's woes. Further action will be required to get the consumer spending again - especially at a time when household costs continue to rise in the form of record petrol prices and further increases in utility bills. Unfortunately, in view of the marginal nature of the MPC [Monetary Policy Committee's] decision, a further cut seems far from guaranteed.'