Premier League clubs spent about 160 million pounds ($227.7 million), six percent up on January 2008 with City and Spurs accounting for more than half.
Elsewhere, market conditions were more austere, with the top flight clubs in Europe's four other major leagues between them spending less than England's Premier League alone, according to business advisory firm Deloitte.
"European transfer markets as a whole have been extraordinarily quiet, and much of the activity in England has been in the form of loans and short-term contracts," Simon Chadwick, professor of Sport Business Strategy and Marketing at Coventry University, told Reuters.
In Italy, spending dropped by about 43 percent at about 29 million euros ($37.29 million) compared to 2008, according to media estimates. In many cases official fees were not disclosed.
German clubs spent a little over 16 million euros for 42 player transfers. Hamburg made about 14 million pounds from the sale of Nigel de Jong alone to Manchester City but used only a small part of that cash for new singings.
Abu Dhabi-backed City, the world's richest club, set the highest level of spending by any club in a January transfer window, Deloitte said. City shelled out a reported 50 million pounds, despite their failed record bid for AC Milan's Kaka.
With concerns mounting about the sustainability of revenues from ticket sales, sponsorship deals and television contracts, loan deals which do not impose long-term costs on a club have been a frequent solution.
"This transfer window was much quieter than in the past. There is no money on the market," said Bruno Satin, head of the football division at the sports management agency IMG.
Although transfer expenditure has dampened, there is no sign of a narrowing of the gap between Europe's richest clubs and the rest, an issue that UEFA said last week was one of its main concerns for this year.
Several club officials, including the president of the European Clubs Association, Karl-Heinz Rummenigge, have called for the introduction of player salary caps.
But Giovanni Palazzi, president of the Italy-based StageUp sports business research unit, said: "A salary cap may not work properly in Europe, due to clubs' different financial models."
Satin, who is also a players' agent, added: "In our job, the problem is that a number of players are paid more than their real value... A salary cap could be a good idea, but we are still far away."
AP