British retail sales posted a surprise fall in December, crushing hopes that buoyant Christmas trading would provide a boost to the economy.
The Office for National Statistics said this morning that sales including fuel fell 0.1 per cent month on month in December.
On an annual basis, retail sales posted a jump of 0.3 per cent, the smallest annual rise since April.
The main driver behind the monthly fall in sales was non-food retail, chiefly sales of household goods that dropped three per cent – the biggest fall since January 2010, the ONS said. Food sales, which fell 0.3 per cent on the month, also contributed to the weakness.
“The post-Christmas consumer hangover is likely to deliver a flat January, despite the sales which started earlier and have seen unprecedented discounting,” said Keith Richardson, retail sector lead at Lloyds Bank Commercial Banking.
“Retailers face another challenging year with their costs increasing, both in terms of business rates and input prices, and inflation set to continue outperforming household income.”
City A.M. Reporter