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United Kingdom retail sales slide in tough December

United Kingdom retail sales slide in tough December

The amount consumers spent grew by just 1.9 per cent last year, marking the slowest annual growth for five years and a sharp fall on 2016 when sales jumped 4.6 per cent.

Economist Sam Tombs at Pantheon Macroeconomics said December's plunge in retail sales confirms that November's surge merely reflected people bringing forward Christmas present shopping to take advantage of Black Friday discounts.

December Retail sales in the United Kingdom have dropped by 1.5 percent from November highlighting low consumer spending due to rising prices, revealed the Office for National Statistics (ONS) on Friday.

Black Friday sales in November distorted the readings for December, ONS said, noting that consumers "continue to move Christmas purchases earlier with higher spending in November and lower spending in December than seen in previous years".

"A month-on-month dip and year-on-year rise appears hard to assess, but the truth is that these kinds of comparisons are increasingly unsafe for retail analysts trying to untangle performance over the Christmas period".

The retail figures showed sales volumes fell 1.5% on November, which was boosted by strong Black Friday trade.

The Office for National Statistics reported that sales volumes were down 1.5 per cent in the month, worse than the 0.8 per cent City of London analysts had pencilled in.

"The longer-term picture is one of slowing growth, with increased prices squeezing people's spending", said Rhian Murphy of the ONS. However, it fell 0.2 per cent against the euro, dropping as low as €1.3332.

Inflation has been outstripping increases in wages, denting the spending power of shoppers.

"But there could be some light at the end of the tunnel", he added, amid signs that wage growth is picking up and inflation may have peaked.

Ben Brettell, senior economist, at stockbrokers Hargreaves Lansdown, said that year-on-year retail sales rose by 1.4% in December, but that was lower than the 3% jump predicted by analysts.

But Ian Gilmartin, head of retail & wholesale at Barclays Corporate Banking, said: "Although it might look like a negative result for the retail sector at first glance, December's retail data needs to be considered more carefully".

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