Pressure for an interest rate cut increased after figures showed consumer spending on the High Street slowed again last month.

British Retail Consortium (BRC) deputy director-general Bill Moyes said the case for a slight reduction in the cost of borrowing appeared stronger.

The BRC said retail sales in July rose by 3.8 per cent on a like-for-like basis, down from four per cent growth in June and far below March's 7.5 per cent rise.

While summer sales helped clothing stores, overall food and drink sales slowed and the mobile phone market was also weaker.

Mr Moyes said the figures illustrated a slowdown which was far from a collapse but added consumer confidence was suffering. He said: "Uncertainty over long-term financial security may need to be addressed."

Retail sales soared ahead at the start of the year as consumers took advantage of low interest rates.