Retail sales hit their lowest level for 11 years last month, the British Retail Consortium’s monthly sales monitor has found.

The monitor revealed that like-for-like sales increased by just 0.2% compared with January 2005.

Kevin Hawkins, director general of the BRC, said: “The message from every sector of our industry is the same. The squeeze on consumer spending continues unabated. The economy badly needs a cut in interest rates.”

Meanwhile, Waitrose has defied retail gloom by revealing that its sales increased 9.9% in the week to January 28.