Retail sales growth for the last month has eased to its weakest rate for almost a year, according to a survey by the Confederation of British Industry.
Results from the survey showed that only ten per cent of retailers reported a rise in year-on-year sales in the first half of October, the lowest its been since November last year and the third month in a row in which sales have been below the long-tern average of 18 per cent.
The three-month average in sales volumes has also continued to slow from its peak in May at +36 per cent to just +12 per cent, the lowest balance since December 2006.
CBI has attributed the dull performance to the low growth in wages, five consecutive hikes in interest rates since August 2006 and peoples’ hesitation to purchase autumn ranges after a poor summer.
John Longworth, chairman of the CBI's distributive trades panel said “the buoyant” trading period from earlier on this year has “tailed off”.
"Although slightly better sales are expected in November, retailers' hopes have been disappointed for the past few months, and they anticipate only subdued growth in the important run-up to Christmas,” he said.
“As consumers begin to feel the pinch, they will look to retailers who offer them value for their money," he said.
Ian McCafferty, CBI’s chief economic adviser added: "With added uncertainty about the economy because of the credit crunch, we can expect this slower pace to continue next year."