Retail sales fell by a worse-than-expected 0.1% last month, according to the Office for National Statistics.

A 0.4% drop in sales volumes in food stores led the fall, which analysts blamed on higher interest rates, the credit crunch and mild weather.

"The consumer has had a rough year - a combination of successive interest rate hikes, unemployment starting to edge up, record levels of personal debt and fixed rate mortgages finally starting to bite mean that consumers are approaching the festive season with a level of caution,” said Lisa Dillon, director of retail at Ernst & Young.

“It all adds up to a relatively tough Christmas and an even tougher new year.”