CMC Markets

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By Faarea MasudBusiness reporter

July's wet weather caused a slowdown in UK retail sales, new figures suggest, with demand for clothing falling as people felt less need to restock their summer wardrobes.

Overall retail sales grew 1. 5% In July , down from 2. 3% The year before, The British Retail Consortium (BRC) said.

The Group said rising interest rates were also squeezing shoppers' budgets.

" While consumer confidence is generally improving, it remains below longer-term levels, " said boss Helen Dickinson .

According to The trade body's research, spending In July was dented by The damp weather, which did " no favours to sales of clothing, and other seasonal goods".

It found that sales of all types of clothing and shoes declined in what is usually a busy month for fashion retailers.

The wet weather also slowed down The post-pandemic return to brick-and-mortar stores, The BRC said, while online sales continued to slide, falling nearly 7% year-on-year.

Sales of furniture, health and beauty goods held up though.

'Doing more with less'

The Group found that retailers were offering more promotions to get shoppers through The Door .

" Both consumers and retailers are finding that they are having to get used to doing more with less as conditions remain incredibly challenging, " added Paul Martin, head of retail at KPMG, which helped with The research.

It Comes after Inflation - The rate at which prices Rise - which is its lowest level in More Than a year but still high by historical standards.

This is due to energy bills and food prices starting to fall, official figures suggest.

Last week, The Bank of England put up interest rates for The 14th Time In a row in a bid to make borrowing more expensive, dampen demand and therefore slow price rises.

This is driving up mortgage rates, something Ms Dickinson said was squeezing household budgets.

Economist Michael Hewson from Cmc Markets said The slowdown in The pace of consumer spending was " not surprising" considering interest rate rises.

" This is what rate hikes are designed to do, " He Said .

But Mr Hewson said there was a " looming cliff edge" as there is a lag before The effect of such rises is fully felt in The economy.

He Said consumers were now saving more to mitigate a sharp Rise in mortgage costs as their fixed rate deals come up for renewal.

New figures from Barclaycard, which monitors about half of credit and debit card spend in Britain, also suggest there has been an overall slowdown in spending.

But there were a few bright spots, with more being spent on takeaways and streaming services as people stayed indoors away from The Rain .

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Source of news: bbc.com