Sales at John Lewis, the department store and bellwether of high street trading, failed to improve last week after sales fell by 6 per cent.

The fall in trade at the department store chain follows a drop of 6.6 per cent in the first week of December, and is 4.9 per cent lower than the same week last year.

John Lewis said that the drop improved to a decline of 4 per cent if the 2.5 per cent VAT reduction was taken into account.

Andy Street, managing director of John Lewis, said: "In this challenging market, we must be pleased with this outcome.

"It shows that our customers, although more judicious in their purchasing than last year, have been loyal to us. And it is still possible that this current week will be the peak one, so a flourish in the final pre-Christmas days would round off a resilient campaign."

This morning's figures from John Lewis come as a monthly survey suggests the cut in VAT may prove "a glimmer of hope" for consumer confidence in the UK.

The Consumer Confidence Barometer, released by GfK NOP, the research group, found that the consumer confidence index has risen by 2 points in December to -33, but is 19 points below the 2007 level.

It suggests confidence in big purchases, such as furniture or electrical goods, may be returning: it grew 10 points but remains down 15 points on last year.

Confidence in the economic situation over the coming year fell 5 points.

Rachael Joy, of the consumer confidence team at GfK NOP, said that while falling fuel prices and recent interest rate cuts were heping restore confidence, it "continues to hover at near-record lows".

UK consumers have become even less confident about the future economic situation but among these historically low levels of confidence, there is perhaps a glimmer of hope: for the third month running, there has been an improvement in the number of consumers who think it is a good time to make a major purchase, suggesting that high street deals and the small reduction in VAT have improved consumers views on this area," Ms Joy said.

"The crucial question for the economy is whether the improvement in this index will be translated into activity on the high street during the January sales.”

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