British retail sales barely grew in July, data showed today, in yet another sign that cash-strapped consumers cut back spending, underscoring the risks for the fragile economic recovery.

The Office for National Statistics said sales volumes including automotive fuel grew by just 0.2 per cent last month, leaving retail sales unchanged from last year's level.

Analysts had forecast a rise of 0.3 per cent on the month and an equal annual rise, as retailers slashed prices aggressively in summer sales.

Excluding fuel, retail sales also grew by just 0.2 per cent on the month and were 0.2 per cent lower than in July 2010.

Business surveys have pointed to weak sales in July and many retailers expect a further worsening. Britons have cut back on spending as soaring prices, higher taxes and slow wage increases eat into their budgets and uncertainty about job security weighs on sentiment.

Economists expect consumption to be a major drag on the economic recovery, which has stalled in recent months.

Reuters