Swingeing price cuts fail to revive UK's retail sales figures

Savage price cutting by Britain's retailers last month did nothing to revive flaccid high street sales, according to figures published yesterday.

Savage price cutting by Britain's retailers last month did nothing to revive flaccid high street sales, according to figures published yesterday.

Volumes of sales were flat in July, leaving annual growth at 4.0 per cent. This was lower than forecast and down from June's 4.5 per cent. One of the worst performances was achieved by the sector that cut prices deepest. Clothing and footwear sales dropped 0.2 per cent on the month despite slashing prices more than 7 per cent - the steepest rate for 53 years.

Food sales also suffered, delivering annual growth of 1.8 per cent compared with 2.7 per cent in June and the lowest for almost a year.

However, there were signs of strong growth in sectors such as household goods, which is often seen as a barometer of the consumer economy because of its link to the housing market. The sector recorded annual growth of 9.8 per cent, the strongest since March. Some economists said this showed there was little sign of the slowdown in the consumer economy that the Bank of England wants to see before it takes its finger off the interest rate trigger.

"There is still insufficient evidence of a domestic demand slowdown for the MPC's hawks to relax," said Adam Cole of HSBC.