Clothing and footwear sales in the UK fell for the third consecutive month in December, as the overall retail sector experienced its weakest pre-Christmas period in three years, according to the British Retail Consortium (BRC).

Retail sales edged up only 0.3% on a like-for-like basis, compared to a 2.6% annual rise in December 2006, representing the weakest growth figures since March 2006 (which was affected by the later Easter that year), and the weakest December figures since 2004.

The poor performance in December caused the three-month trend rate of growth to fall to 0.8% from 1.8% in November, again on a like-for-like basis.

"This result is somewhat worse than we expected and points to a very challenging first half for 2008," said BRC director general Kevin Hawkins.

"Given that the full effects of the Bank [of England]'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."

KPMG head of retail Helen Dickinson said shoppers had replaced regular spending patterns with a smaller number of bargain-hunting "big swoops".

Although clothing and footwear sales had fallen, food and drink, and toiletries and cosmetics, grew sales, she added.

"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," she said.

"This does not bode well for retailers struggling with rises in their cost bases of around 4%."