Retail sales in the UK in May fell 2.4 per cent on a like-forlike basis, as the High Street slump continued.

And it prompted further calls to the Bank of England Monetary Policy Committee to cut rates at its latest monthly meeting on Thursday.

Sales rose by 1.4 per cent on a total basis, compared with a year ago, but the three-month trend rate of growth fell to -1.5 per cent from -0.9 per cent in April for like-for-like sales, and to 2.1 per cent from 2.6 per cent for total sales. Many stores resorted to discounts and sales days to attract customers, according to the British Retail Consortium survey.

It said consumer caution and the slowing housing market continued to hit sales of big- ticket and household items.

However, some smaller 'treat' and 'pampering' products were popular, as purchasers tried to lift the gloom.

Kevin Hawkins, BRC director general, said: "While some analysts still claim that the continuing weakness in retail sales is only a 'blip', these figures should remove any lingering doubt that we are now in a consumer-led recession.

"There has been little or no improvement in any sector of the retail industry and some are reporting a further deterioration. We urge the MPC to reduce interest rates at this week's meeting."

Helen Dickinson, head of retail at survey backers, KPMG, blamed the poor weather. She went on: "Sales continue to be driven by promotional activity but as that has still only delivered a 2.4 per cent decline for the month, many retailers will have been left wondering where to now? The detrimental impact on margins will only become apparent as the year progresses."

Clothing sales worsened even further, with marked declines for women's, men's and childrenswear. Footwear also had a bad month.

In electrical and electronic sales were little changed from previous months, with underlying conditions still tough.

DIY and gardening suffered in the unseasonal weather.

Furniture and carpet sales were not quite as bad as in April but continued to be hard-hit by the slower housing market and consumer caution.

The result will be more retailers driven to the wall in 2005 as the high street endures the slowest growth for more than 40 years, according to Verdict Research.

It said retailers with sales worth £1.7 billion had gone into administration, were shut down or put up for sale.

And it warned that more could follow as higher interest rates, a stagnating property market and rising debts restrict retail sales growth to just 2.2 per cent this year.

Casualties of the spending crisis have included department stores group Allders and fashion retailer Pilot Clothing, while discount chain Eisenegger was rescued from administration by a deal involving its management team.

Verdict said: "With consumer demand weaker and a host of cost increases eating into margins, a shake-out of weaker high street fascias is inevitable."

According to Verdict, 830 stores were closed or put up for sale between January and May, accounting for 1.4 per cent of high street sales and 2.2 per cent of trading space.

* Pay deals have fallen to 3.1 per cent, just below the rate of inflation, despite "virtually full employment" across much of Britain, a new report claims.

Average settlements in the three months to April were revised down slightly from previous estimates and now lag the 3.2 per cent inflation rate for the previous year, said pay analysts Incomes Data Services.