The past few weeks have revealed precisely how much respite Christmas spending has granted fashion retailers on the UK high street, with chains including Marks and Spencer and JJB Sports providing trading updates on the festive period.

After months of consumer angst leading up to the Christmas period, retail chains in the UK went all out this December with bigger promotions and earlier clearances than ever.

Traders were looking to address shortfalls during the year so far, with many consumers tightening purse strings upon news of falling house prices, rising interests rates, and a credit crisis at major mortgage lender Northern Rock.

Furthermore, chains were well aware during Christmas that the retail environment could worsen still over the coming 12 months, and went into battle using phrases like 'cautious', 'slowdown', 'tough trading' and 'weak sales' in their outlooks.

As it turned out there were mixed fortunes, with firms like House of Fraser and John David putting their thumbs up while others, including M&S and JJB, instead kept their guard up.

However, the British Retail Consortium (BRC) said it was the worst Christmas for traders in three years, with clothing and footwear companies struggling in particular.

The BRC, which provides a reliable measure of the bottom line for the UK's high street, followed this up by saying that the Bank of England's failure to cut interests rates was affecting customer-facing businesses directly.

Signs were good last Monday, and House of Fraser (7 January) was early to report that gross profit during the five-week Christmas period was ahead of last year, with same-store sales up 2.4%.

In addition, online ethical fashion retailer Adili, which launched in September 2006, said the following day that sales in the four weeks prior to the final shipping date for Christmas - 21 December - were up by 388% on those for the same period in 2006.

However, last Wednesday (9 January) M&S reported that third-quarter same-store revenues had slipped 2.2% amid poor clothing sales. The company's shares fell by 20% as it warned that tough trading conditions are likely to persist in 2008.

M&S said that its slowdown was most marked in general merchandise, which includes clothing and footwear, with same-store sales dropping 3.2%. Its overall group sales rose by 2.8% in the quarter, with UK sales up 2%. However, sales of general merchandise were down 0.7%, with a 1.2% drop in demand for clothing offsetting a 3.2% rise in sales of home products.

By the end of the week there was more cause for optimism as sports and leisurewear retailer John David Group (JD) raised its full-year guidance after the company enjoyed a better than expected Christmas trading period.

It said that same-store sales for the full eight-week Christmas trading period to 5 January were up 9.3%, and that the group's gross margin had improved in the first-half against the equivalent period last year.

This week started with two of the sector's important players - JJB Sports and Ted Baker - reporting the relative generosity of their respective Christmas shoppers.

JJB issued a cautious outlook for 2008 having suggested that second-half profits had fallen despite a 1.2% increase in retail revenues. Crucially the sporting goods operator reported lower combined gross margin results over Christmas as it cleared non-current products from stores to make space for newer stock.

Designer fashion chain Ted Baker, meanwhile, said that margins were in line with expectations and sales were up 12.5% in the eight weeks leading up to Christmas.

The BRC has worked out that UK retail sales rose 0.3% during December, with clothing and footwear sales actually falling. This compares to a 2.5% increase in last year's month, with the consortium saying growth was the weakest since the decline in March 2006 when sales were hit by Easter falling in April.

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

"Given that the full effects of the Bank'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."

However, the interest rate Hawkins refers to did not arise last week. And as he says: "The longer the Bank delays cutting rates again, the greater the risk of the economy heading in the wrong direction."

Helen Dickinson, head of retail at KPMG, added: "Sales did grow in December but, as the worst performance since March 2006, growth can only be described as weak.

"In the lead-up to Christmas there were huge daily swings as shoppers replaced even spending patterns with a smaller number of bargain-hunting 'big swoops'.

"Sector performance also varied. Clothing and footwear sales actually fell in December for a third consecutive month, while food and drink, and toiletries and cosmetics grew."

The BRC reported today (14 January) that retail sales in Central London in December were 7.1% higher than a year earlier though. But it said retail footfall slowed, with Western and Eastern Europeans the main spenders.

Both American and Japanese visitors were still discouraged by the weakness of the dollar and the yen, the BRC said.

The consortium said that clothing and footwear sales remained difficult overall in the capital, despite widespread discounting, but that designer fashions and accessories had continued to outperform.

The bottom line is a somewhat dry Christmas for retailers on the whole, with the slowdown at M&S resonating a long way, much like the fears of a credit crisis in the UK did last year.

However, it was not all doom, gloom and coal for the UK high street at Christmas, with many clothing and apparel chains continuing to grow in a marketplace that is as competitive as ever.

By Joe Ayling, news editor