THE high street is suffering a record fall in sales, an influential survey has found.

The Confederation of British Industry (CBI)'s monthly Distributive Trades Survey (DTS) found that 42 per cent of retailers questioned reported that sales were down during the year to this month, compared with 23 per cent saying they had risen.

The balance of minus 19 per cent was the lowest since the survey began in 1983.

John Longworth, chairman of the DTS panel, said: "A year ago, retailers were reaping the benefit of Euro 2004, which was credited with boosting sales of everything from football clothing to televisions and beer.

"But, while this may explain part of the record year-on-year decline now registered, there is no doubt that the underlying picture is also bad."

Sales of furniture, carpets, hardware, china and DIY were particularly bad. Clothing sales remained weak.

The survey reinforced the message delivered earlier this month, when figures showed annual growth in sales was at its weakest level for six years.

Kevin Hawkins, director of the British Retail Consortium, said: "We are not surprised at the figures released today by the CBI and have been saying for months that trading conditions on the high street would get worse if the Bank of England failed to take action.

"This is exactly what is happening, and even City economists have now come around to our views that a significant cut in rates is essential to prevent further deterioration."

HSBC economist John Butler said the figures pointed towards a recession.

He said: "If the CBI weakness even partially comes through in the official data, then the Bank of England will cut interest rates very soon."

He said the bank would have to balance that against figures showing a continued consumer appetite for debt.

"A rate cut may shore up demand in the near-term, but it may only achieve that through creating an even bigger problem in terms of indebtedness later on," he said.