High street sales plunged to the lowest level in a quarter of century in August as wet weather and increased pressure on consumers' wallets deterred shoppers from splashing out.

Some 60 per cent of retailers said that trade fell in August compared with 13 per cent who said they had risen, according to figures from the CBI.

The resulting rounded balance of -46 per cent is down from -36 per cent in July and is the lowest figure since the CBI began its series in 1983, indicating that conditions for retailers are worse than during the last recession.

Stores selling furniture, carpets and household goods were the worst affected with every single shop reporting falling trade in August.

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Supermarkets were the only retailers to report a growth in sales, although the 7 per cent balance of grocers recording a rise in sales was down from 19 per cent in July.

In a worrying sign for the Bank of England, which is battling to keep a lid on inflation at 4.4 per cent, the balance of retailers reporting a rise in prices remained high at 48 per cent, although this was down from 56 per cent in May.

The Bank will announce its decision on the interest rate, currently at 5 per cent, next Thursday, September 4.

There are also signs that more jobs could be lost, with 31 per cent more retailers reporting a fall rather than a rise in employment, compared with 11 per cent in July.

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