LONDON: UK inflation rose to 4.4% in July, up from 3.8% in June and more than twice the government's 2% target. The official figures have been fuelled by a record 13.7% year-on-year hike in food prices.
The spiralling cost of living is forcing shoppers to keep a firm grip on their spending, despite retailers offering massive discounts to revive conspicuous consumption.
Latest figures from the British Retail Consortium show that like-for-like sales fell 0.9% last month compared with July 2007. Total sales, which include new stores, rose 1.7%.
The results reveal negative like-for-like sales growth for four of the past five months; and between May and July like-for-like sales were 0.3% lower than the same period last year.
Coments BRC director general Stephen Robertson: "Frivolous shopping is off the agenda as most customers concentrate on value and durability, and there are few signs the slowdown has yet bottomed out."
Big ticket items, such as furniture and flooring, have been hard hit, with consumers postponing such purchases or opting for basic or discounted products.
Separately, the Confederation of British Industry has warned that the UK economy is in worse shape than previously thought and has revised its 2009 economic growth from 1% to 0.4%.
Data sourced from BBC Online; additional content by WARC staff