RETAILERS last night called for further interest rate cuts after figures showed the high street had seen the worst July in ten years.

Retail sales during the month fell by 1.9 per cent on a like-for-like basis, compared with a year ago.

Cooler, wetter weather made July a worse month for retailers than June, according to figures from the British Retail Consortium (BRC).

Customers remained cautious and reluctant to buy furniture, carpets or large electrical items.

The BRC did not say how much of an effect the London terror attacks had on trading. However, KPMG head of retail Helen Dickinson said many experts thought the impact of the bombings, together with the general deterioration, could have been much worse.

She said: "We did see a fall in customer traffic across the month, but those that did venture out found good value in the promotions being offered.

"The performance of the food sector was the highlight for the month, assisted by the improved weather conditions."

Kevin Hawkins, director general of the BRC, said: "Despite a relatively short burst of good weather and continued discounting by many retailers, the downward trend in like-for-like sales has worsened. In fact, this is the worst July since 1995.

"While the recent cut in interest rates by the Monetary Policy Committee is obviously welcome, it will take several months for there to be any significant effect on consumer spending. More cuts are needed between now and Christmas."

The Bank of England cut interest rates from 4.75 per cent to 4.5 per cent last week amid slower economic growth and weaker consumer confidence.