UK retail sales volumes this month are down significantly on last October, and another big year-on-year drop is forecast next month, according to the Confederation of British Industry's latest survey.

UK retail sales volumes this month are down significantly on last October, and another big year-on-year drop is forecast next month, according to the Confederation of British Industry's latest survey.

The CBI's distributive trades survey, as well as signalling no relief for the high street as the key festive trading season approaches, also shows that car dealers remain on the ropes as many consumers take fright at the notion of expensive purchases.

Fifty per cent of retailers surveyed by the CBI between September 24 and October 15 said sales volumes were lower than a year earlier, with only 23% declaring a rise and the rest reporting a flat position.

The net 27% suffering a year-on-year fall, subtracting the 23% reporting a rise from the 50% posting a drop, is the same as that in the previous monthly survey. Although not quite as bad as the respective net 36% and 46% suffering an annual decline in July and August, the balance of 27% is grim in the context of the CBI survey's history.

Specialist food stores, clothing shops, household goods outlets, furniture and carpet retailers, booksellers and stationers, and chemists suffered sharp year-on-year falls in sales in the first half of this month.

The footwear and leather, and hardware, china and do-it-yourself categories bucked the falling trend. General grocers managed a modest year-on-year rise in sales.

Andy Clarke, chairman of the CBI distributive trades panel and retail director of Asda, said: "Shoppers face competing pressures on their wallets and are spooked by worries over job losses and the slowing economy. Retailers have had another tough month and, while there are some winners, the majority are suffering. The sector looks set to endure a very challenging run-up to Christmas."

Referring to the half-point cut in UK base rates to 4.5%, implemented on October 8, Clarke added: "We are hoping the recent drop in interest rates will cut consumers and business some slack as it feeds through to the wider economy."

Iain Ferguson, policy executive at CBI Scotland, said: "The weakness in consumer confidence suggests Scottish households will continue to watch the purse strings in the run-up to Christmas."

Only 12% of UK retailers surveyed between September 24 and October 15 said sales volumes were good for the time of year, with 47% considering them poor and 41% believing they were average.

None of the 24 motor traders in the survey reported a year-on-year rise in sales. Eighty-seven per cent reported a fall, with 13% declaring an unchanged position. A net 87% of motor traders also forecast another year-on-year fall in sales in November.

In September, a net 78% of motor traders had reported a year-on-year drop in sales.

Vicky Redwood, of consultancy Capital Economics, said this accelerating decline suggests "the plunge in new car registrations in September was probably the start of a prolonged period of falling car sales".

Redwood said the CBI survey "unsurprisingly shows that high-street spending growth has remained extremely sluggish in the aftermath of the recent financial turmoil".

Although noting it might have been "disproportionately affected by the extreme financial instability in the second half of September", she added: "Equally it should have also received a boost from any immediate impact on consumer confidence from the interest rate cut at the start of October.

"The CBI survey echoes the gloomy tone of other recent anecdotal evidence, including the Bank of England Agents' scores. Retail sales growth therefore still seems to have slowed rather more sharply than the official retail sales figures suggest."