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UK July retail sales growth slows, outlook weakens - CBI

LONDON, July 29 (Reuters) - British annual retail sales growth slowed in July, despite a big rise in clothing purchases, and is expected to weaken further next month, a survey by the Confederation of British Industry showed on Wednesday.

The CBI distributive trades survey's retail sales balance fell for a second successive month after hitting a five-month high in May, dropping to +21 in July from +29 in June, bucking economists' forecasts for a modest rise to +30.

The outlook for sales in August was even gloomier, with the index dropping to a two-year low of +13 from +33.

"Despite the upbeat outlook for the UK economy, retailers are still finding conditions challenging and it's certainly something every shopkeeper will need to keep an eye on," said Barry Williams, a senior executive at supermarket Asda and chairman of the CBI panel.

The CBI said clothing sales rose at the fastest annual rate since January, but food sales were flat and shoe sales fell.

(Reporting by David Milliken, editing by Ana Nicolaci da Costa; uk.economics@reuters.com; +44 20 7542 5109)