Wet weather has continued to dampen retail sales in July, with like-for-like sales growth of just 1.2 per cent.

The figures from the British Retail Consortium (BRC) show the smallest growth since November, with food sales and clothing both falling as a result of extreme weather conditions and higher interest rates.

Home entertainment was one area that benefited from the weather and the unprecedented sales of the Harry Potter book meant that overall book sales also performed well.

KPMG head of retail Helen Dickinson said that the comparatives were distorted by extreme weather. “July 2006 was the hottest on record and July 2007 was the wettest,” she said. “We are also seeing lower demand growth, given ongoing pressures on disposable incomes.”

Last week, the Bank of England decided to keep interest rates unchanged, but at least one more rate is expected in the coming months. This will follow five rate rises since last summer.