Wet weather hits retail sales

The recent onslaught of heavy rain has hit the retail market, with like-for-like sales increasing by only 1.2 per cent in July.According to the British Retail Consortium (BRC), increasing pressure on disposable incomes as well as the wet weather deterred shoppers, causing sales to fall to their lowest level since last November.But despite torrential rain affecting clothing, footwear, DIY and gardening sales, the BRC said department stores benefited from increased footfall.Other figures in the BRC survey showed summer fashions were still struggling with sales little better than the two-year low seen in May.Food and drink sales were also lower than a year ago for the first time since 2000 after the sector suffered from strong comparatives with the World Cup period.In light of the market's shift, policymakers have warned against further interest rate hikes.BRC director general Kevin Hawkins said: "Given these conditions, the Bank of England should now wait and see what happens over the next few months before doing anything further with interest rates."The Bank recently voted to hold borrowing costs at 5.75 per cent after five hikes in a year - but most experts predict that interest rates will hit 6 per cent in the autumn.© Independent Television News Limited 2007. All rights reserved.

ITN | August 7, 2007

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