Slow retail spending adds no new ammunition for an interest rate rise

Sluggish High Street spending has offered the Bank of England little reason to hike interest rates as its counterparts at the US Federal Reserve weighed a knife-edge decision on rates.

Retail sales growth of 0.2% in a damp August — slightly improving on stalling sales in July and a decline in June — was in line with City forecasts as shoppers stocked up on school uniforms.

The figures follow softer economic signs elsewhere, although the Bank of England is keeping a wary eye on wages, growing at the fastest pace for six years.

Capital Economics UK economist Ruth Miller said: “The pace of spending growth has remained fairly feeble so far this quarter.

“But we doubt that this signals a more widespread slowdown in the consumer recovery.”