Berlin - German retail sales posted a surprise fall in April, underscoring the growing threat to Europe's biggest economy posed by surging inflation and slowing growth.

Sales dropped 1.7 per cent in April to post their second monthly fall, the Federal Statistics Office said. Retail sales dropped 2.2 per cent in March.

Economists had predicted a modest rise of 0.6 per cent in April. Year-on-year sales were down 1 per cent.

The release of the latest retail sales figures come in the wake of data published earlier this week showing annual German consumer prices accelerating to a higher-than-forecast 3 per cent in May from 2.6 per cent in April.

The result of the jump in inflation has been to chip away at consumers' purchasing power. (dpa)