Europe's retailers will be hoping for a free-spending holiday season, after figures showed that shoppers kept a tight grip on their purse strings over the autumn.

September showed the biggest month-on-month decline in spending in the eurozone since March 2000, with retail sales down 2.1% from August.

The news underscored the risk that the long-awaited revival in the major Continental economies may be stillborn.

It also fuelled speculation that European Central Bank chiefs would cut interest rates when they meet later this week.

The ECB has kept rates at 3.25% for a year, despite calls for a cut to reinvigorate the eurozone's faltering economy, citing inflationary pressures.

In the UK, the Bank of England has also left its 4% base rate unchanged for a year so as to avoid stoking a potentially destabilising house price boom.

In contrast, US fears of stagnation triggered a cut in borrowing costs to just 1.25% in November.

Across the board

Monday's figures from the European Union's statistical office, Eurostat, made grim reading for retailers.

The decline - which was most marked in Portugal, where sales slid 2.2% - far outstripped the sub-1% slide which many economists had predicted.

In Germany, the figures are likely to fuel calls to relax the country's tight opening-hours regulations.

The current rules mean shops can open till 6pm on the four Saturdays before Christmas.

But the usual 2pm or 4pm closing time will be back in force afterwards.

Germany's HDE retailers' association is pleading for the government to extend the longer opening hours into the peak sales period between Christmas and the New Year.

But whether or not the HDE gets its way, the ban on Sunday trading is certain to stay.

Bright spot

The new numbers meant that sales were down 0.6% on September 2001.

Some small comfort came from the announcement by Eurostat that the figures for August had been underestimated.

Instead of a 0.8% gain on July and a 1.5% increase in the full year, the revised figures were 1% and 1.6%.