31 August 2012 Last updated at 05:07 ET

German retail sales fall 0.9% in July

Rising fuel prices are causing shoppers to tighten their purse strings

Retail sales in Germany fell in July, with analysts citing rising fuel prices as the reason why shoppers reined in their spending.

Sales in Europe's largest economy fell 0.9% compared with the month before, the Federal Statistics Office said.

But June's figure was revised up from a drop of 0.1% to show a rise of 0.5%.

It comes a few days after a separate report showed that German business confidence had fallen for the fourth month in a row to a 29-month low.

German economic growth slowed between April and June to 0.3%

'Key driver'

"Fuel prices are reaching record levels and this is the kind of inflation that people really feel, which in the very short-term leads households to save money on other expenditure," said Christian Schulz at Berenberg Bank.

"It doesn't mean that household consumption overall goes down but that retail sales suffer so I think the key driver behind this decline is fuel price inflation," he said.

On an annual basis, July sales were down by 1%.

June's year-on year figure was revised up from a rise of 2.9% to show a gain of 3.7%.