The volume of UK retail sales fell by 0.8 per cent on the previous month.

BCC chief economist David Kern says, ‘The drop in retail sales for February is worse than expected and reinforces our view that the Office of Budget Responsibility’s expectation for GDP growth of 0.8 per cent this quarter is too ambitious.

‘With the government persevering with austerity measures, it is clear that businesses and consumers will face many pressures in the months ahead.’

Kern adds that while it is necessary for the UK to persist with tough fiscal policies as a means of restoring stability to the public finances, the impact of this must be alleviated by an expansionary monetary policy with low interest rates.

‘Today’s figures reinforce our view that the MPC must act cautiously and not rush into a premature increase in rates,’ Kern concludes.