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Retail sales dipped for the first time in nine months in October, in a sign that past interest rate rises may now be hitting consumer spending.

High street sales were 0.1 per cent lower last month, compared with a 0.3 per cent rise in September, according to the Office for National Statistics (ONS).

Analysts had been expecting sales to remain flat, with news of the drop having sparked speculation that the Bank of England could lower interest rates in the near future.

Today's figures show that the largest falls in sales occurred with textile, clothing and footwear stores, where trading was down by 0.5 per cent in October.

However analysts stressed that last month's fall followed a period of "robust" high street sales.

Capital Economics spokesman Paul Dales explained October's mild weather and the impact of the Rugby World Cup may have temporarily depressed sales, adding that the year-on-year increase in retail sales of 4.4 per cent was still strong.

"Accordingly, today’s data do not suggest that sales are about to fall off a cliff and retailers may yet enjoy a decent Christmas," said Mr Dales, who said the Bank of England's monetary policy committee (MPC) would not necessarily rush to cut interest rates as a result.

However, on the whole, analysts agree that consumer spending is set to slow over the coming months as shoppers come under pressure from the rise in interest rates since August 2006 and tighter credit conditions resulting from the ongoing global credit crunch.

Explaining the potential implications for interest rate levels, Global Insight chief economist Howard Archer said: "The strength of consumer spending over the coming months will be a key factor determining how quickly and how far interest rates fall.

"The November Bank of England inflation report opened the door to lower interest rates, and lower retail sales and significant price discounting in October keeps open the possibility that the MPC could act as soon as December," he added.

Earlier this month the Bank of England opted to keep the UK's benchmark interest rate on hold at 5.75 per cent, but yesterday's inflation report from the central bank warned of slowing economic growth in 2008.

The report, which stressed inflation would remain on target even if interest rates were cut twice next year, has prompted speculation the official cost of borrowing could be slashed.