The Labour government has made growth its key objective, but figures released on Thursday showed the economy failed to grow in the three months to November.

Earlier this week, Chancellor Rachel Reeves pledged to go “further and faster” to improve growth in order to boost living standards.

Economists said the retail sales figures capped off a “disappointing” end to 2024 for the sector, in a period businesses typically seek to make the most money.

“With the chancellor under mounting pressure to deliver growth, the news that retail sales fell in December of all months is at the very least unwelcome,” said Danni Hewson, head of financial analysis at AJ Bell.

“It’s a crucial period of time when retailers make enough money to see them through those sluggish early months of the year when people are paying off their credit card bills and thinking ahead to summer sun.”

Alex Kerr, UK economist at Capital Economics, said the worse-than-expected sales figures were “further evidence that the economy had very little momentum at the end of last year”.

But he added: “Although the economy clearly struggled at the end of last year, we doubt that will last.”

While the weak sales figures hit the value of the pound, hopes that interest rates will be cut further in February helped to push up share prices.

The FTSE 100 stock index of the UK’s biggest publicly-listed companies touched a record high of 8,480 on Friday morning.