RETAILERS across the country endured a "worse than expected" Christmas period as figures today showed sales in December grew at their weakest rate for three years.

The British Retail Consortium (BRC) said like-for-like UK sales rose 0.3 per cent last month, compared to 2.5 per cent growth in December 2006 and 2.6 per cent the year before.

Last month's rise was also the weakest of any month since March 2006, the consortium warned, with the latest three-monthly trend also down.

BRC director general Kevin Hawkins said the figure heralded a "very challenging" start to the year for stores, and called on the Bank of England to cut interest rates from 5.5 per cent this week to boost high street spending.

He said: "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."

The sluggish month echoes comments from major retailers, including Next which spoke of "difficult" trading and also warned its UK stores probably would not return to like-for-like sales growth this year.

Marks & Spencer is due to provide a trading update tomorrow, while Sainsbury's follows on Thursday. Shares in both companies have taken a pounding in recent days as investors brace themselves for disappointing figures.

The BRC survey, which covered the five weeks between November 25 and December 29, found that total sales - including store openings - were up 2.3 per cent compared to the same month in 2006.

But the growth rate between October and December fell to 0.8 per cent from 1.8 per cent for like-for-like sales, and to 2.8 per cent from 3.8 per cent on a total measure.

Helen Dickinson, head of retail at accountancy firm KPMG, also warned the figures did not bode well for this year, and predicted sales decreases could be on the way.

She said: "Sales did grow in December but as the worst performance since March 2006, growth can only be described as weak.

"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 four per cent."

Weak and strong performers

HERE is a sector-by-sector analysis by the British Retail Consortium:

Food - The best performing sector, with Christmas food and drink sales up on last year.

Clothing - Sales were down year-on-year for the third consecutive month. The decline was slightly smaller than in November and October, down to discounting and sales days and an earlier start to some clearance sales.

Footwear - Down on a year ago and "very tough" for some. Top-end items such as "Ugg" boots performed better than mass market brands.

Electrical and Electronic - Demand for games consoles remained strong while growth in flat-screen TVs slowed. Sales of white goods were difficult. Continued growth in laptops Health and Beauty - After several strong months, sales growth slowed to its weakest since March. The usual pre-Christmas boost for fragrances and gift sets failed to offset slower demand elsewhere.

Leisure Goods -Books by comedian Russell Brand, TV chef Nigella Lawson and Top Gear presenter Richard Hammond helped reading matter enjoy good growth. Home entertainments continued to sell very well Mail Order - A varied month, with clothing and footwear mixed, electricals and electronics holding up better and household appliances struggling