UK retail sales volumes dropped by 1.9 per cent month-on-month in the key trading month of December, the sharpest drop since April 2012, seasonally-adjusted official figures have revealed, raising fears over future consumer spending amid rising inflation.
The plunge in retail sales volumes, unveiled by the Office for National Statistics, was much worse than the 0.1 per cent dip forecast by economists.
ONS data published earlier this week revealed annual UK consumer prices index (CPI) inflation, which has been pushed higher by the tumble in the pound in the wake of last June’s Brexit vote, rose from 1.2 per cent in November to 1.6 per cent last month. Annual UK CPI inflation was just 0.3 per cent in May.
Howard Archer, chief UK economist at consultancy IHS Markit, said: “The extent of December’s retail sales drop fuels suspicion that consumer spending will be markedly softer in 2017 as the fundamentals for consumers progressively weaken.”
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