A slump in sales of new cars saw US retail sales fall 0.1% in June, according to government figures.The Commerce Department data surprised analysts who had expected a 0.4% climb in month-on-month sales.

However, when sales from the volatile auto sector were stripped out, sales actually rose 0.3%.

Surging fuel costs, as a result of global oil prices, and worries about interest rate rises have seen shoppers being more cautious with their cash.

The figure was an indication that petrol prices were “beginning to bite and beginning to squeeze customers pretty hard”, said economist Nariman Behravesh of Global Insight.

Consumer spending accounts for about two-thirds of U.S. economic activity but there is concern that higher energy bills will hit households and lead to further cutbacks in discretionary spending in the shops.

The escalating violence in the Middle East, which has pushed oil above $78 a barrel gives little hope of any imminent fall in fuel prices.

However, it was not all bad news - with consumers still spending about 5.9% more than they had in June 2005.