British retail sales suddenly fell in December

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Britain’s retail sales fell unexpectedly in December, dealing a fresh blow to Chancellor Rachel Reeves and raising fears that the economy may have collapsed late last year.

The first official economic data in December showed that the volume of goods purchased decreased by 0.3 percent between November and December. Office of National Statistics He said on Friday.

The figure compares with a 0.4 percent increase expected by Reuters economists and a 0.1 percent increase last month.

The data comes a day after showing the economy It rose 0.1 percent in November.hovering around a two-month contraction but falling below analysts’ forecasts for a 0.2 percent expansion. The economy has not registered any growth in the three months until November.

“Disappointing retail sales raise the risk of a contraction in GDP in Q4,” said Elliott Jordan-Dock, senior economist at Pantheon Macroeconomics, adding that the Bank of England’s Monetary Policy Committee will “definitely cut rates” when it meets next month.

In the year After cutting borrowing costs twice in 2024, the MPC left rates unchanged at 4.75 percent in December. Markets expect the central bank to cut its benchmark rate by a quarter point in February.

The pound fell 0.5 percent to $1.218 after the figures were released. The gilt continued to rally, pushing the 10-year yield up 0.05 percentage point to 4.64 percent.

Sales fell by 0.8 per cent in the three months to December compared with the previous three months, figures from the ONS show.

Alex Kerr, economist at consultancy Capital Economics, said it had fallen. Retail sales Growth slows down in the fourth quarter.

The decline reduced the level of GDP by 0.039 percent in the quarter, but it was still expected that the economy did not grow at all rather than shrinking in the period.

“Either way, the economy is weak and there was no activity at the end of last year,” Kerr said. Thanks to expected growth in household incomes, “we doubt the economic downturn will continue in the near term,” he added.

In December, discounting at supermarkets was partly lifted by non-food stores such as clothing retailers, which have rebounded from slumps in previous months, the ONS said.

“Retail sales were disappointing in the golden quarter, reflecting a difficult business environment,” said Nicholas Found, head of business content for Retail Economics at consumer research firm.

ONS Senior Statistician Hannah Finselbach said the December decline was “the worst in 2018”. “It was pushed by the lowest month for food sales, which hit their lowest level since 2013, with supermarkets particularly affected,” he said.

For all of last year, retail sales posted their first expansion in three years. In the year It will rise by 0.7 percent in 2024, followed by a 2.9 percent decline in 2024 and a 4.1 percent decline in 2022.

In the year This reflects how the increase in prices has affected the purchasing power of consumers, despite spending 18 percent more.

Additional reporting by Ian Smith