Retailers urge interest rate cut

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The British Retail Consortium (BRC) said like-for-like retail sales rose by 1.8% in August, a slight improvement from the 1.2% increase seen in July, but a far cry from the 2.5% growth seen last year.

BRC director general Kevin Hawkins called on the bank to help encourage shoppers back to the high street ahead of its meeting to decide on interest rates on Thursday.

He said: "The squeeze in disposable incomes, reinforced by worries about interest rates, is depressing both retail sales and shop prices.

"There is no case for another hike in interest rates. The next move should be in the opposite direction."

Consumers have endured five rate increases since last August and experts widely predict that a further hike is due before the end of the year.

Not even the arrival of drier weather provided much of an uplift, although sunnier weekends boosted food, clothing and footwear sales following a poor performance during July.

Barbecue and picnic foods, salads and fresh fruits did well during the warmer weather, which also led to a lift in beers, wines and soft drinks.

Furniture and homewares fell back from their strong growth in June and July, when aggressive discounting drove sales ahead.

The less volatile three-monthly measure of like-for-like sales growth remained stable at 2.1%, while total sales slipped to 4% from 4.1%.