The consumer spending spree may have run out of steam, according to an industry survey, fuelling hopes that the Bank of England will leave interest rates unchanged for another month.

The Confederation of British Industry said that retail sales in July grew at their slowest rate for 18 months.

Alistair Eperon, in charge of the survey, said that "the retail sales boom seems to be over," and added that despite continuing price cuts and stiff competition among high street retailers consumers "seem to be spending less".

The news came as the Bank of England's Monetary Policy Committee started its monthly review of interest rates, prompting suggestions that it will now leave these unchanged.

Figures keep falling

Industry watchers said concerns over stock market falls and fragile house prices had knocked shoppers confidence.

The CBI's survey questioned 258 firms and found that while 44% had enjoyed an increase in sales compared with a year ago, 28% had seen them fall.

This created the lowest three-month sales figures since December 2000.

Mr Eperon said interest rates should be left on hold to give companies stability and give the economy time to recover.

Too soon to call?

Some market watchers, however, cautioned against reading too much into the CBI's figures.

"The spending boom has left many predictions of its demise in its wake over the last 2-3 years, and we would hesitate to call time on it now," said Danny Gabay, an economist at JP Morgan.

Other economists have pointed to the current low interest rates and unemployment together with increasing wages, as signs that consumers may still be tempted back to the shops.