Last month's record temperatures took their toll on the High Street, causing sales growth to wilt, retail figures showed yesterday.

According to the CBI's monthly distributive trades survey, 41 per cent of retailers said sales in August were up on those a year before, while 29 per cent said they were down.

The balance of just 12 percentage points between positive and negative responses contrasts with a figure of 27 points in July and falls far short of an expected balance of 24 points.

Nevertheless the August figure was the fifth positive score in a row and, with a balance of 28 points between those expecting sales to grow this month and those who believe they will contract, the CBI was upbeat .

Chief economic adviser Ian McCafferty said: "The August heatwave proved to be a turn-off for shoppers in some sectors. However, retailers' expectations for this month suggest the slowdown was just a blip."

For some, the weather was a boost. Grocers enjoyed strong sales as cold drinks, ice-cream and barbecues disappeared off the shelves. But shops selling clothing, footwear and leather goods had disappointing sales.

The previous month's study appeared to show warm but less dramatic temperatures in July appearing to give sales a boosts. The CBI said the most recent survey was the first time extreme temperatures had appeared to affect sales for eight years.

In other figures released yesterday, improving consumer confidence helped the service sector achieve its fastest growth rate for two-and-a-half years last month.

According to a study by Charted Institute of Purchasing and Supply (CIPS), activity in the service sector grew for the fifth month in a row in August.

The closely-watched business activity index rose to a seasonally- adjusted figure of 57 last month, up from 56.6 in July, indicating the fastest growth in the service sector since January 2001.

The study follows separate CIPS figures showing strong growth in production in the embattled manufacturing sector on Wednesday and came as the Bank of England prepared to announce its monthly decision on interest rates today.

Thursday September 4, 2003