UK retail sales fell in June for the second consecutive month, in a sign that the consumer boom which has helped buoy the wider economy could be running out of steam.

Sales dipped 0.7% in June compared with the previous month, figures from the Office for National Statistics showed, defying analyst forecasts of a 0.2% rise.

The latest figures follow a 0.6% decline in May from April.

Retail sales have not fallen for two months running since the autumn of 1998, according to ONS.

Economy blues

The weakening sales data could spell trouble for the UK economy, which depends on consumer spending for about two thirds of its activity.

It also makes it more likely that that the Bank of England will put off interest rate increases until there is firmer evidence of solid economic growth.

"It reinforces the argument for not raising rates," said Ross Walker, economist at the Royal Bank of Scotland.

There was speculation earlier this summer that the Bank of England, which last year cut rates to a 40-year low of 4%, was poised to raise them again because of concern about galloping house prices.

Expectations of an imminent rate rise receded earlier this month when it emerged that inflation had fallen to a 27-year low in June.

Jubilee distortion

Some analysts believe that a sharp fall in share prices since the beginning of the year is helping to take the heat out of consumer spending.

The latest sales data reflects weaker spending in both the food and non-food retail sectors.

However, ONS warned that the figures for June might have been distorted by the extra Jubilee bank holidays.

The World Cup finals are also thought likely to have disrupted normal spending patterns.

"I think there was always going to be lower sales volumes in June, following poor weather in the first part of the month, the bank holiday, and the football," said Philip Shaw, economist at Investec bank.