UK retail sales growth muted as food sales dip

U.K. retail sales grew at a slower pace than expected in July after a fall in the amount spent on food for the first time in 25 years when compared to the previous year, official data show.

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Retail sales increased by 2.6 percent compared with July last year and were up 0.1 percent on the previous month, according to the Office for National Statistics (ONS).

Economists polled by Reuters had expected retail sales to grow 0.4 percent growth on the month, with weakness largely down to lower petrol and food sales.

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The ONS said July 2014 marked the first fall in consumer spending in food stores since the food stores series began in 1989.

Figures for July follow a strong reading for the second quarter, when sales volume jumped 1.6 percent quarter- on-quarter, the fastest growth for a quarter in 10 years.

The weaker data is likely to ease concerns of a Bank of England interest rate rise, after minutes from the Monetary Policy Committee showed two members of the bank's interest rate-setting committee voted to raise interest rates in August.

By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave