High street stores in the UK have suffered their worst start to the year since the second World War, in a possible foreshadowing of developments in the Republic.
Retail sales volumes fell in the UK by 1.3 per cent, according to the UK's office of national statistics.
The data confirmed evidence released last week by the British Retail Consortium - which represents the retail sector - of a poor early year performance by the retail sector.
"This is a staggeringly weak report," said Philip Shaw, chief economist of Investec investment group.
John Butler of Hong Kong Shanghai Banking Corporation described the data as "shocking".
Analysts attributed the poor performance to increasingly indebted consumers being squeezed by interest rate increases.
Niall Dunne of Ulster Bank said the development was leading to greater pessimism about growth prospects for the UK economy.
"Suddenly the retail consortium's claim looks accurate, and now it's the optimism of Bank of England governor Mervyn King which looks misplaced", Mr Dunne said.
He added that the Bank of England was likely to cut interest rates in May.
In its latest quarterly bulletin the Central Bank and Financial Services Authority of Ireland has warned that rapid growth in consumer debt is exposing the economy to interest rate increases.
The recent strength of consumer spending and housing construction is widely seen as underpinning the present strength of the economy in the Republic.
The most recent Central Bank statistics show that private sector credit grew last year by almost €60 billion, representing a more than a 30 per cent increase on the previous year.
