Retail sales
Month-on-month retail sales are up by 0.6 percent in December. REUTERS/Ki Price Reuters

Retail sales crept up 0.6 percent in December from the previous month, amid widespread price drops by struggling retailers desperate to lure customers in off the street.

Textile, clothing and footwear store sales rose 1.8 percent, while food store sales nudged up by 0.6 percent, according to the figures from the Office for National Statistics.

Household goods stores suffered a difficult month, with sales falling by 2.4 percent on November.

Mild winter weather and strong fuels and fashion markets boosted December's retail sales by 2.6 percent on the previous year - though this may be exacerbated by particularly bad winter weather in the same period in 2010.

Retail Market Woes Continue in 2012

Several retailers have already entered administration in 2012, including clothing store Peacocks and gift shop Past Times.

Electronic goods store Dixons suffered a Christmas setback, after the three months up to 31 December saw like-for-like sales plummet five percent.

Recent research from business advisors Deloitte suggests British retailers are in for a very difficult 2012, with many more administrations likely across the year.

Separate forecasts by the Centre for Economic and Business Research predict the UK is already in a double-dip recession and that the UK's flatlining economy is now contracting by 0.4 percent.

Inflation will fall sharply in 2012, says the Bank of England, and is currently at 4.2 percent.

This should drop to below two percent - the government's target - by the end of the year, easing the squeeze on households.

Retailers will hope this means Britons will start spending again, giving a much needed boost to the retail market.

Rising unemployment and a looming Eurozone disaster may dent this hope, however.