High street retailers are continuing to suffer under tough trading conditions, according to July figures from two prominent surveys.

Data from the Confederation of British Industry (CBI), covering 20,000 retail outlets, shows a negative 18% balance in the overall volume of sales last month.

Some 47% of stores reported drops in sales, while 29% said they rose.

The annual figures have not risen since the end of 2004, which the CBI attributes to anxiety over the housing market, tax increases and interest rates.

The Bank of England will decide tomorrow whether to cut rates. It is assumed by most analysts that the Bank's Monetary Policy Committee (MPC) will cut the base rate by a quarter-point to 4.5%.

"As the risk of inflation remains low, a timely cut in interest rates by the MPC on Thursday is essential to maintain growth and consumer confidence," said Sir Digby Jones, director general of the CBI.

"The argument for a 'wait and see' approach is fading fast. It is time for the Bank of England to get off the fence."

Meanwhile, the British Retail Consortium's (BRC) price index shows a decrease of 1.65% in overall shop prices in July. The inflation rate is negative for the first time since March, leaving prices 0.60% lower than they were in July 2004.

Widespread discounts and promotions of non-food items are to blame, the BRC said.

"Yet again we see how the decline in consumer spending and the intense competition in the retail market is driving down prices," said Kevin Hawkins, director general of the BRC.

"This is obviously good news for the consumer, but the continuing increase in property and other costs well above the current rate of inflation will leave many retailers in a position which is not sustainable for much longer."

The BRC, too, called for an interest rate cut, and Hawkins said he hopes that "at long last the MPC will take action."

The furniture, carpet, clothing, confectionery, tobacco and news sectors all fell at substantially faster rates in July than they did in June, the CBI survey discovered. Only grocery stores reported strong growth, but at a slower rate than in 2004.