The worst January retail sales figures since records began in 1995 may have been partly down to the terrible weather and the return of VAT to 17.5%  – but they were bad enough to raise fears that the proclaimed end of the recession may turn out to be short-lived.

The British Retail Consortium reported a 0.7% fall in like-for-like sales - excluding store expansions and closures - last month, compared with January 2009. Experts had been expecting them to increase by 0.5%, following the strongest December sales figures for eight years.

Stephen Robertson, director general of the BRC, said the figures meant "an awful start to the year” and were in stark contrast to what he described as an upbeat December.

"This is the worst January sales growth in the 15 years we've been running the survey," he said. "The VAT change brought some sales forward to December, but customers are becoming cautious again in the face of economic and political uncertainty. Retailers will be hoping these results are mainly a snow-induced blip, rather than an indication of further difficulties."

Some economists now fear that Britain may be heading for the dreaded “double dip”  downturn later this year – a possibility strengthened by the end of the car scrappage scheme in March.

“Households face still very challenging conditions, including high unemployment, still markedly falling full-time employment, low earnings growth, high debt levels, and January's VAT hike. Meanwhile, still serious concerns about the economic outlook and jobs are likely to maintain consumers' desire to improve their personal finances," said Howard Archer of IHS Global Insight.

In contrast to the gloom in the shops, online sales were 14.6% higher in January than a year earlier, as the foul weather kept people indoors.

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