RETAILERS hoping for a sustained post-Christmas spending spree were left disappointed yesterday when a survey pointed to sluggish high street sales last month.

More than one in every three shops on the UK high street told the Confederation of British Industry (CBI) that their sales volumes fell during the first two weeks of January - compared with 28 per cent that reported higher demand.

Economists said the survey was unlikely to nudge the Bank of England towards cutting interest rates as it still indicated that sales had improved over the past six months.

A negative balance of 11 was healthier than the record low of minus 35 in November even though it was worse than the zero mark recorded last month.

At the same time, expectations for sales last February were the best recorded by the CBI since May last year.

John Longworth, chairman of the CBI panel responsible for the survey, said sales remained heavily dependent on price discounts and promotions.

His comments come days after Ernst & Young (E&Y) warned that the UK was in danger of going down the same route as the US and becoming stuck in a cycle of heavy price-cutting.

Discounts as steep as 80 per cent were common on the high street in the days after Christmas and E&Y said the spread of offers was the widest it had ever seen.