Consumers kept their hands in their pockets in March, which proved another muted month for the high street "as the economic slowdown takes grip," according to new figures. Analysts said it would add to calls for an interest rate cut by the Bank of England next month.
The Confederation of Business Industry said retail activity remained subdued in March as consumers felt the effects of the credit crunch.
The CBI's distributive trades survey for March revealed that retailers had reported flat year-on-year sales in March. It found that the balance of stores reporting positive sales over the previous year, continued to spiral to 1 per cent from the 36 per cent peak reported in May.
Howard Archer, the chief UK and European economist for research firm Global Insight said the survey was better than expected "but nevertheless pointed to pretty muted activity".
He added: "We still expect the Bank of England to trim interest rates by a further 25 basis points to 5 per cent in April to counter the markedly tighter credit conditions."
Ian McCafferty, the CBI's chief economic adviser, said: "The picture now is of subdued activity as consumers tighten their belts amid the general cooling of activity we are seeing across the whole economy."
The big losers were those selling durable household goods, such as refrigerators and washing machines, which suffered a fifth consecutive month of shrinking sales over the previous year. But shoe and leather goods sellers reported 71 per cent year-on-year sales rises, and grocers, booksellers and stationers also had a good month, according to CBI figures.Reuse content