Retail sales fell more than expected, by 0.6 per cent, between April and May as shoppers cut back on spending across the board.

As well as the decline in monthly sales, the Office for National Statistics (ONS) said today that trade fell by 1.6 per cent compared to May last year.

The weak figures echoed the British Retail Consortium's index, which showed like-for-like sales of -0.8 per cent over the month.

Economists said the depressed retail sales suggest that Britain is further from recovery than thought, as the retail sector is normally one of the first areas of the economy to start growing after a recession.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "The marked fall in retail sales in May is a reality check that the UK economy is still in a very fragile state and serious obstacles.

"Indeed, while consumers are benefiting from the boost to their purchasing power coming from sharply reduced mortgage payments and retreating inflation, they are under serious pressure from a number of factors - most notably, including elevated and rising unemployment, markedly reduced earnings growth and heightened debt levels."

Tarlok Teji, head of retail at Deloitte, said that the figures suggested sales were "bouncing along the bottom. He added: "The good weather enjoyed so far this year and a promising forecast for the summer may give DIY and gardening retailers some respite. However, the fall in the figures compared to last year’s numbers paints a bleaker picture."

The news, combined with the separate emergence this morning of a further deterioration in public finances, sent sterling to a one-week low against the euro.

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