Retail sales rebounded last month after the worst December in three years, a survey showed yesterday, suggesting consumer spending may be slowing but is not about to collapse.

The British Retail Consortium said sales values last month were 2.6 per cent higher, on a like-for-like basis, than in January last year. Total sales, which include new floor space, were 4.9 per cent higher. Both rates were the highest since September.

Strong food sales boosted the overall total while discounts of electrical items and home furnishings also drew in cost-conscious shoppers.

However, the value of clothes sales fell for a fourth month in a row, despite aggressive discounting.

"While the doom-mongers may be temporarily silenced by this month's results, it's certainly too early to draw any conclusions about how the rest of the year will pan out," said Helen Dickinson, head of retail at consultancy KPMG which compiles the survey.

"The growth was heavily skewed by a strong performance in week one, as January sales absorbed demand carried over from a poor December."

Consumer spending has been the engine of the economy over the past three years but has slowed in the past few months and household incomes have been squeezed by rising bills and mortgage payments.