World Cup hits High Street sales

HIGH Street sales have suffered their weakest showing in more than two years, fuelling hopes that the Bank of England will hold off on raising interest rates. Retailers blamed the Jubilee Bank holiday and the World Cup, the Office of National Statistics said.

Retail sales volumes fell 0.7% in June, far lower than economists had predicted. The slide follows a 0.5% fall in May, and means retail sales in June were up just 4.6% on the same month last year. It was the first time sales have fallen in two consecutive months since September/October 1998.

Economists already predict the Bank will keep interest rates at 4% for the next few months, due to low inflation and the recent stock market slide. Ross Walker, economist at Royal Bank of Scotland, said the spending dip 'reinforces the argument for not raising rates'.

Philip Shaw, economist at Investec, said he was not concerned by the drop. 'I think there was always going to be lower sales volumes in June, following poor weather in the first part of the month, the bank holiday and the football.'