UK retail sales volumes this month are down sharply on January last year, a survey revealed yesterday, increasing still further the danger of the economy tipping back into recession.

The grim sales figures from the Confederation of British Industry confirm fears that consumers would rein in spending hard after the festive period in the face of a grim economic outlook, as unemployment mounts and the Conservative-Liberal Democrat Government continues to slash public sector jobs.

Official data on Wednesday showed that the UK economy contracted by 0.2% in the fourth quarter of last year. Further contraction in the opening three months of 2012 would mean the economy was officially back in recession, which is defined as two consecutive quarters of falling gross domestic product.

Forty-four per cent of retailers surveyed by the CBI reported that sales this month were lower than in January last year, and only 22% said they were higher, with the remainder reporting an unchanged position.

The net 22% reporting sales volumes this month have been lower than last January signals the sharpest year-on-year drop since March 2009. Household goods retailers and department stores were among those which suffered particularly weak sales.

And a net 10% of retailers predicted sales would be down year-on-year in February.

In December, a net 9% of retailers reported a year-on-year rise in volumes, but this positive figure has proved to be a blip.

Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "The CBI's distributive trades survey for January is hugely disappointing and shows substantial deterioration in retail sales, thereby fuelling fears that pressurised and worried consumers are hunkering down after a spending flurry in the run-up to Christmas and to take advantage of the best of the bargains at the start of the clearance sales."

He added: "Given the key role of consumer spending, the CBI survey heightens concern that the economy is set for further contraction in the first quarter of 2012 after GDP fell 0.2% in the fourth quarter of 2011, thereby putting the UK back into recession."

Samuel Tombs, UK economist at consultancy Capital Economics, said: "The sharp deterioration in the CBI's distributive trades survey in January suggests that the pre-Christmas surge in spending was just temporary relief from the on-going downturn in the consumer sector. It seems as if big price discounting ahead of Christmas merely pulled forward spending from the traditional January sales period.

"And we doubt the post- Christmas spending hangover will be brief. Rising unemployment, tightening credit conditions and the continued squeeze on real incomes all look set to mean that real consumer spending continues to fall throughout 2012."

Only 21% of retailers thought their sales this month were good for the time of year, with 41% viewing them as poor. And the volume of orders placed by retailers with their suppliers in January was down sharply on the same month of last year.

Retailers signalled volumes of stock were more than adequate to meet expected sales.

Ian McCafferty, CBI chief economic adviser, said: "Shoppers have reined in spending across the board at the start of the new year after taking advantage of early discounting last month, which boosted pre-Christmas sales.

"Family budgets are under continuing pressure with inflation still high and wage increases modest. Consumers are still holding off particularly from buying big-ticket items like washing machines and fridges. Online and mail order sales were the only areas that performed well in January, but growth was still down on last month."

Scotland appears, like the rest of the UK, to be in great danger of falling back into recession.

Analysis of figures published by the Accountant in Bankruptcy this week showed the number of business failures in Scotland hit a fresh record of 1278 last year, up 16.4% on the previous all-time high hit in 2010. A CBI survey on Wednesday showed Scottish manufacturers suffered a plunge in new orders from within the UK, and cut their workforces sharply in the last three months.