High Street sales plunge to lowest for 25 years

The gloom on the High Street deepened today after sales tumbled to the lowest level for 25 years.

Shop sales crashed this month as households were squeezed by rising food, fuel and mortgage prices and sliding confidence in the economy.

City economists warned Britain is on the brink of recession as the slowdown in consumer spending gathers pace despite massive price cuts in the summer sales.

Howard Archer of Global Insight said the survey from the CBI was "a real shocker", while Malcolm Barr of JPMorgan said sales "fell off the proverbial cliff" in July.

"Consumers are reining in their spending appreciably in the face of seriously squeezed purchasing power," said Archer. "The prospects for consumer spending over the coming months are pretty bleak."

Bellwether retailers such as Marks & Spencer and John Lewis are suffering while weaker firms are being hammered. Woolworths today issued shocking sales figures .

The CBI said the summer sales had failed to lure shoppers back and warned the outlook for August was for little improvement.

Some 61% of retailers said sales in July were lower than a year ago while just 25% reported an increase. The balance of minus 36 was the weakest since the survey began in 1983.