The Office for National Statistics retail sales figures for March 2003, published on Tuesday, reveal an underlying 4.1 per cent growth in the volume of retail sales.

According to Barclays retail industry experts this is the lowest underlying rate of growth for three years. It contrasts with 4.7 per cent sales volume growth in the three months to February 2003, and over 6 per cent in April and May 2002.

By sector, clothing and footwear retailers continue to enjoy the strongest underlying volume growth with an increase of 6.8 per cent for March 2003.

According to Barclays deflationary pressures on the high street appear to be stabilising and in both March and February this year shop prices were 0.4 per cent lower than a year earlier. This compares with 1 per cent lower in January 2003 and 1.5 per cent lower in December 2002.

Paul Clarke, national retail director, Barclays Business Banking said: "April has been better for the high street as shoppers took advantage of the Easter break and women's fashion retailers continued to experience very healthy growth. May will be a critical month for retailers as the National Insurance increase hits pay packets and consumers think about voting with their wallets."