As the UK is officially deemed as firmly in a recession retail sales figures out today have confirmed a difficult December for many retailers, said the British Retail Consortium (BRC).

Office for National Statistics (ONS) figures show the total value of sales fell 0.8 per cent compared with December 2007. That compares with a fall of 1.4 per cent recorded by the BRC’s Retail Sales Monitor published last week.

After several months of unexpectedly strong official retail sales figures, a sharp drop from November’s positive year-on-year growth means the ONS figures are now painting a similarly gloomy picture to the BRC’s own results.

The widely accepted definition of a recession - two consecutive quarters of falling economic growth - has occurred after gross domestic product (GDP) fell by 1.5 per cent in the last three months of 2008 following a 0.6 per cent drop in the previous quarter.

Stephen Robertson, director general of the British Retail Consortium (BRC), said:“The official figures are now painting a more realistic picture of how tough conditions are for customers and retailers.

“A poor Christmas for retailing overall hides the contrast between sectors. A triple whammy of dramatically declining sales, margin-crushing discounts and rising costs hit non-food retailers hardest overwhelming some businesses and destroying retail jobs. Food sales were more resilient - we all have to eat.

“Our own results show most people believe we have been in recession for months and have been behaving as if we were for some time. With customers already budgeting defensively as job fears mount, confirmation of recession can’t weaken confidence much more.”

The figures showed that manufacturing made the largest contribution to the slowdown, contracting by 4.6 per cent after a 1.6 per cent per cent decrease in the previous quarter.

It represents the biggest quarter-on-quarter decline since 1980, and a 1.8 per cent fall on the same quarter a year ago.

Unemployment is also accelerating sharply, with 1.92 million people now out of work, the housing market remains severely depressed and retail sales are weak, though December figures were better than expected, growing by 1.6 per cent.

The average recession in the UK since 1955 has lasted three quarters, but the past two recessions have lasted for five.

In fact, many forecasters believe a recession could stretch into 2010 and be as severe as that of the early 1990s.

The official government forecast is for a decline of 0.75 per cent to 1.25 per cent in 2009, although the Chancellor Alistair Darling has indicated that he will revising this figure in the Budget.

The pound has slumped against the euro and many analysts believe that parity is now inevitable. Sterling also hit a seven-year low against the dollar this week.

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