Fresh evidence of a slowdown in high-street spending emerged yesterday as the CBI said retail sales growth in June had proved disappointing.
The employers’ organisation had expected a strong pick-up in sales last month compared with June last year when spending was affected by negative factors including the World Cup and golden jubilee bank holidays. In the event, 39 per cent of retailers said sales were up against 10 per cent reporting a decline, giving a balance of 10 per cent. In May a balance of 17 per cent of retailers had said they expected sales to rise in the following month.
The June figure also compared with a positive balance of 14 per cent of companies who reported in May that sales had risen.
The CBI’s figures may give the Bank of England more ammunition to justify a cut in interest rates when its Monetary Policy Committee meets next week. The new Governor, Mervyn King, this week highlighted the slowdown in the consumer boom as a cause for concern and also said the recent rise in sterling could act as a brake on growth. Both comments were seen as possible pointers to a rate cut.