Shopper failed to spend as much in June

The Office for National Statistics (ONS) said retail sales fell by 0.4% during July, leaving them 4.4% higher than a year earlier.

The latest fall is the largest seen since the beginning of the year.

Analysts had predicted sales would wilt by 0.6% after rising by 1.9% in June as weeks of sunshine prompted a rush for summer clothes and barbecues.

An ONS spokesman said: "I wouldn't read too much into the fall at all," pointing out that three-month growth rates were broadly comparable to those seen in the second half of last year.

Quarter-on-quarter sales actually picked up, rising 1.4% from May to June to stand 4.6% higher on the same period in 2002.

Rates doubts

The data casts doubt on the Bank of England's recent decision to cut interest rates while consumer sales are still showing no sign of their predicted collapse.

The Bank cut rates to a 48-year low of 3.5% at the start of July before seeing the strong figures for June.

Minutes of the Bank's Monetary Policy Committee (MPC) meeting in August, released on Wednesday, showed the Committee had been surprised by the strong data but did not expect strong consumer spending to continue.

Did consumers stay at home in July, using barbecues bought in June?

The MPC also warned the current expansionary monetary policy stance would also have to be reined in at some point.

Alan Castle of Lehman Brothers said: "There are hints that the underlying picture for the consumer has picked up somewhat from the start of the year.

"It makes you think that a lot of this consumption is being fuelled by a build up of debt which cannot last."

The ONS figures showed that almost all categories of retail sales fell in July.

Household goods was the only exception, rising by 0.5% - which experts put down to consumers stocking up on more fans or cooling equipment, or even as evidence of a slight revival in the housing market.