British retailers are facing a "very challenging" run-up to Christmas after high street sales continued to fall during October.

The Confederation of British Industry's (CBI) monthly distributive trades survey found that half the companies questioned had seen sales decline and 23 per cent had experienced an increase.

The resulting balance of -27 per cent is the same as September's rate of deterioration and is the seventh consecutive month in which retailers reported falling sales.

While high street trading is under pressure, the CBI's reading of activity in October was ahead of the -35 fall that analysts had been expected and far ahead of the -46 per cent reading taken in August, which was the lowest since the series began in 1983.

The manufacturing sector has continued to suffer because of weakness on the high street with 36 per cent of retailers reporting a cut in orders placed with suppliers.

Among the sectors, specialty foods and household durable goods reported the largest sales declines.

Andy Clarke, chairman of the CBI Distributive Trades Panel and retail director of Asda, said: "Shoppers face competing pressures on their wallets and are spooked by worries over job losses and the slowing economy.

"Retailers have had another tough month and, while there are some winners, the majority are suffering. The sector looks set to endure a very challenging run-up to Christmas. We are hoping the recent drop in interest rates will cut consumers and business some slack as it feeds through to the wider economy."

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