BUSINESS leaders have called for a halt to interest rate rises following more evidence of a slowdown in high street sales.

Retailers said this month was unexpectedly weak thanks largely to higher interest rates and rising energy costs.

This month's figures were the first negative sales performance for 18 months, suggesting that rising interest rates were taking their toll.

In its monthly distributive trades survey, the Confederation of British Industry (CBI) said 38 per cent of retailers reported a fall in year-on-year sales, while 29 per cent said there had been a rise.

Ian McCafferty, CBI chief economic advisor, said the underlying trend for the past three months suggested a meaningful slowdown was under way.

He said: "Interest rate rises and higher household bills have left consumers with less to spend, and the slowing housing market has provided an additional reason for caution."

With more retailers expecting negative sales next month than at any time since March 1995, Mr McCafferty called on the Bank of England to put any further interest rate rises on hold.

The CBI said consumers were showing increasing reluctance to commit to so-called big ticket items, with year-on-year sales of goods such as televisions and fridges falling at the fastest rate since June 1992.