Summer washout hits the High Street

Experts have placed the blame on wet weather, which has kept customers away from shops, and a fall in demand for summer food.

The only winners were department stores who enjoyed their biggest boost in more than a year as early sales finally tempted people through the doors.

Retail sales volumes grew by 0.2% on the previous month - below the 0.3% expected by economists - according to the Office for National Statistics.

Food stores saw sales drop 1.1% - the biggest month-on-month fall since August last year - as customers shunned summer goods.

Although sales volumes were slower than expected, experts said policymakers at the Bank of England were unlikely to take the data as a firm sign that five hikes in interest rates in a year were beginning to slow the economy.

Global Insight's chief UK economist Howard Archer said: "The underlying trend in retail sales is still relatively robust and sales have clearly been hit over the past couple of months by the poor weather."

In the ONS's less volatile three-monthly measure of retail sales, volumes grew by 1.1% in the quarter to June, unchanged on the previous month.

The ONS said underlying retail sales growth "remained firm".

ING economist James Knightley added: "It is likely that the very wet weather conditions depressed retail sales and they could rebound next month."

The new figures come as divisions emerged on the Bank of England's Monetary Policy Committee (MPC) over the prospects for Consumer Price Index inflation, which has been above the Bank's 2% target for the past 14 months.

Some members of the committee - including Deputy Governor Rachel Lomax - have urged caution over rate hikes in recent months to give previous increases time to take effect.

Economists pencilling in another 0.25% rise in rates to 6% in the autumn are hopeful that borrowing costs will peak at that level if retail sales show more signs of slowing in the coming months.

Total retail sales for June stood at £24.8 billion, a 3.8% increase on the same month last year, with the strongest growth seen from sports and leisure stores and jewellers.

The ONS data also revealed that prices were 0.1% higher than a year earlier - less than the 0.5% rise in May, and the weakest rate of increase seen since February.

Gavin George, head of retail at accountant Ernst & Young added: "Sales growth was overwhelmingly driven by heavy summer discounting - as high as 70% in some non-food sectors, such as clothing and furniture.

"Inevitably such deep price cuts will be squeezing already thin profit margins, particularly at retailers which have failed to manage promotions and sales events effectively."