BRITISH retailers have blamed the weather for the biggest drop in clothing and footwear prices in 75 years and pinned their hopes for a rebound on a bout of early spring sunshine.

Helped in part by the drop in clothing and household goods, January's headline inflation rate fell to its lowest level for more than a year at 2.9 per cent, prompting expectations of another cut in British interest rates in March or April.

Prices of household goods also dipped in January, by 3 per cent, the sharpest drop since 1956, as consumers continued to put pressure on retailers to lower prices.