BY ILONA BILLINGTON

LONDON—Retail sales in U.K. stores that have been open for at least a year fell in January, and at the second-fastest rate for the first month of the year since records began in 1995, according to the British Retail Consortium's monthly survey.

Business surveys last week indicated that the economy picked up in January, and may escape recession, having contracted in the final three months of last year.

But the decline in retail sales is a reminder of one of the economy's weaknesses, with rising unemployment and slow wage growth likely to crimp consumer spending in the months ahead.

The ...