Sir Digby calls for interest rates cut

The head of the Confederation of British Industry (CBI) has declared that tough conditions on the UK high street are likely to continue.

12:36 02 August 2005

The head of the Confederation of British Industry (CBI) has declared that tough conditions on the UK high street are likely to continue

Speaking after retail sales figures showed a further fall in July, Sir Digby Jones said: "When considered alongside the weakness of order books in the manufacturing sector and the depressed state of the housing market, a marked slow down in the economy is clear to see, as the ONS has acknowledged.

"As the risk of inflation remains low, a timely cut in interest rates by the Monetary Policy Committee on Thursday is essential to maintain growth and consumer confidence."

A total of 47 per cent of retailers said their volume of sales were down last month, compared with 29 per cent who said they were up, resulting in a negative balance of minus 18 per cent.

The underlying sales trend was down to minus 15 per cent, the lowest figure recorded since the survey began 22 years ago.

Retailers did report a slight improvement in July on the previous month in some sectors, with strong growth continuing in the grocery sector.

Most retailers have not reported an increase in annual sales since the end of 2004, as the housing market slows and Britons become increasingly concerned about high levels of consumer debt.