The impact of interest rate rises and the end of the Euro 2004 football tournament have been blamed for a sharp fall in retail sales over the past month.

According to research by the Confederation of British Industry (CBI), 48 per cent of firms said that sales were up on a year ago during July, with 24 per cent saying they were down.

The balance of plus 24 per cent compares with plus 43 per cent in June.

The CBI said that the drop in sales was down to the recent rises in interest rates, which have finally began to curb the high borrowing and spending of shoppers.

Along with the rate increases, many promotions and products offered during the Euro 2004 tournament died as quickly as England’s hopes when David Beckham booted his penalty into the crowd against Portugal. The news that he is partly to blame for a downturn the UK economy will no doubt cap a miserable year for the England captain.

However, the CBI found that the underlying trend of retail sales is healthy, with sales still the strongest since 2001.

Small shops and stores have benefited over the past year from the public’s willingness to part with its cash, despite the economic downturn. It’s hoped that the economic recovery will help keep sales high, despite the interest rate rises.

John Longworth, of the CBI, said that the strong growth in May and June was boosted by sales of items related to Euro 2004.

“Unfortunately the end of the football competition has coincided with the increasing impact of interest rate rises on consumer spending and poor summer weather for most of July.

“The Bank of England’s objective of gently slowing this sector of the economy appears to be working, but it must continue to be cautious.

“Business wants to see a gradual, well-signalled approach to monetary policy when the Monetary Policy Committee meet this week,” he said.