Retail sales across the UK plunged to yet another record low in the first half of August, the CBI said today.
The business group's distributive trade survey showed a balance of 46% of firms reporting weaker sales volumes than a year ago - the worst result in the survey's 25-year history for the second successive month.
Sales were weak across all sectors except food as shoppers faced with soaring bills reined in to pay for essentials, while wet weather also deterred spending.
The ailing housing market hit household goods sales as building society Nationwide reported the biggest annual fall in house prices for almost 18 years.
Andy Clarke, chairman of the CBI's Distributive Trades Panel and retail director of supermarket Asda, said: "This has been a summer that many retailers would rather forget. The downturn in the housing market is continuing to depress sales for those shops selling big-ticket items."
The CBI's latest figures showed a net 31% of retailers have lowered headcount over the past year, with the job-cutting trend expected to continue into September.
Confidence on the high street is also on the floor, with a balance of 38% expecting the situation to worsen over the next three months, dampening investment plans.
Ian McCafferty, the CBI's chief economic adviser, said: "Retail conditions have been extremely tough this summer, and the wet August has been a further blow. Sadly, no let-up is expected as we head into early autumn.
"The business outlook is particularly weak and retailers are having to scale back their employment and investment plans in an attempt to ride out the storm."
But the data at least contained some good news for Bank of England inflation-watchers after the pace of growth in average selling prices edged back from a 16-year high - which could give policymakers more scope to cut interest rates.
But Capital Economics' Vicky Redwood said the figures made "extremely grim reading".
She said: "There is little hope of relief for retailers any time soon. Even a near-term cut in interest rates is unlikely to salvage the economic outlook for the next year or so.
"Indeed, we now expect GDP to fall outright next year, driven in large part by a 0.5% drop in consumer spending."
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