UK retail sales slip modestly in February

British retail sales fell 0.3 per cent on a like-for-like basis last month, the British Retail Consortium said yesterday, suggesting that the household spending slowdown that took hold late last year is continuing.

The decline in sales was far less than the 1.5 per cent fall that Sunday newspaper The Observer said would be reported and which moved British financial markets in early trading on Monday.

The decline follows a 0.5 per cent annual rise in January.

On a total basis, annual sales growth slipped to 2.9 per cent from 3.5 per cent in January.

"After a short-term improvement from the January clearance sales, trade fell back in February to the tough pre-Christmas levels," the BRC said. "A boost around Valentine's Day (February 14) failed to make up for weaker sales later in the month."

The BRC said concerns about interest rates, the housing market and taxes had dampened sales of big-ticket items such as furniture and electrical equipment.

Clothing sales were poor and footwear sales were flat. Do-it-yourself and gardening sales were sluggish while furniture and carpet retailers recorded "generally a poor month", the BRC said. Department store sales were mixed.

Many analysts expect the Bank of England to raise interest rates a quarter point to five per cent later this year although none of the 50 polled by Reuters predicted that move would come at the conclusion of the BoE's meeting tomorrow.