But the rise didn’t match the 2.5 per cent sales increase achieved in December 2006.

According to the BRC the growth is the weakest since March 2006 and the worst December figure since 2004.

The three-month trend rate of growth fell to 0.8 per cent from 1.8 per cent in November for like-for-like sales, and to 2.8 per cent from 3.8 per cent for total sales, reflecting the continuing growth of retail space.

Kevin Hawkins, director general, British Retail Consortium said the results set up a challenging first half for 2008.

 “Given that the full effects of the Bank's previous increases in interest rates have yet to be felt by many households, retailers and manufacturers alike need a rate cut now - preferably a full half-point,” he said.

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Helen Dickinson, retail head for KPMG said: "This sets the scene for the New Year ahead and like-for-like sales look set to move into negative territory as they did in 2005. This does not bode well for retailers struggling with rises in their cost bases of around 4 per cent.”