High street sales wither in February freeze

Britain's retailers are calling on the Bank of England to cut interest rates after high street sales fell in February for the third time in four months.

The British Retail Consortium's monthly sales monitor, released today, shows sales fell last month by 0.3% on a like-for-like basis, which strips out new floor space, compared with the same time last year. Overall sales increased by 2.9%. "These figures are further confirmation that trading on the high street is still tough for many, with sales falling back to the low pre-Christmas levels," said BRC director-general Kevin Hawkins.

"Consumer confidence is evidently still weak and concern over interest rates and the housing market continue to impact on retail sales across all sectors. There is every reason for an appropriate reduction in interest rates to help build confidence and ease consumers' worries," he said.

The Bank of England has left rates unchanged at 4.75% for the last six months, having raised them from 3.5% between November 2003 and last August. There are increasing signs these increases in the cost of borrowing are beginning to have an effect on consumer confidence. The housing market has cooled, car sales have fallen significantly and retail sales have been weak for several months.

The BRC said although the January sales had brought a temporary respite, sales growth had slowed in February, hampered by freezing temperatures and persistent rain and snow.

Like-for-like sales for the three months to February fell by 0.1% compared with the same period last year. Overall three-month sales increased by 2.9%.

Sales were down across almost all sectors, with electrical and electronic goods especially weak after the January sales. Big ticket items such as televisions struggled but white goods, such as washing machines, held up. Clothing sales were poor and worsened during the month with womenswear particularly weak.