The high street has suffered its worst Christmas for three years as hard-pressed families cut back on their festive spending, new figures show, increasing pressure for further interest rate cuts. Daily Telegraph, Independent

Shoppers avoided Britain’s high streets last month, in the latest sign that households are struggling under the weight of high interest rates and record levels of personal debt, according to the British Retail Consortium. It said like-for-like high street sales rose by 0.3% in December, compared with 2.5% growth in December 2006 and 2.6% the year before.

The BRC warned the figures were weaker than expected. They will fuel fears that the high street is bearing the brunt of the consumer slowdown that many economists expect to hit the economy this year.

The Bank of England will decide on interest rates on Thursday. Although the majority of economists expect it to leave borrowing costs on hold, the vote is likely to be a close one.