Retail sales in central London in December, on a like-for-like basis, were down 0.7 per cent compared to the year before.

The drop, however, was considerably less dramatic than the 3.3 per cent decline witnessed throughout the rest of the UK.

Retail footfall last month was stronger than in the past few months and well up on a year ago, in contrast to the small year-on-year decline in the UK as a whole, the British Retail Consortium (BRC) reports.

Due to the strong euro, the capital received a considerable number of Eurozone visitors looking to take advantage of heavy price discounting, and while UK shoppers were attracted to London they were still reluctant to spend.

Stephen Robertson, director general of the BRC, said: “In the context of today’s tough conditions, these are weak figures that could have been worse. This is London retail’s poorest December since 2004 but beats the rest of the UK.

“Some retailers did have strong individual days just before Christmas but overall those didn’t compensate for the dismal weeks before that.

“City job losses are serious and generating a lot of publicity but, generally, London customers are slightly less pessimistic than those in other parts of the country.”

Helen Dickinson, head of retail, KPMG, added: “The weaker pound, which is making the UK very attractive for overseas shoppers, has helped keep the capital’s December sales performance above that of the UK as a whole, where like-for-like sales fell by 3.3 per cent.

“However, a fall for central London of 0.7 per cent is nothing to shout about and does not bode well for 2009, given the economic outlook and London’s position as a major financial centre.”