MNI BRIEF: UK Retail Sales Slow In Dec As Consumer Retrenches
Latest UK data shows shoppers held back in the run-up to Christmas on 'affordability concerns'.
UK retail sales fell sharply in December, as shoppers slowed their spending ahead of the Christmas break, the latest data from the Office for National Statistics showed, reflecting concerns about the state of the consumer as the cost of living bites hard (January Consumer Confidence Dip Ends Q4 Rally).
Total sales fell 1.0% month-on-month and declined 5.8% on year -- the largest annual December decline since records began in 1989. “Retail sales dropped again in December with feedback suggesting consumers cut back on their Christmas shopping due to affordability concerns," ONS Deputy Director for Surveys and Economic Indicators Heather Bovill said.
The data will be closely watched by the Bank of England's Monetary Policy Committee and could at least question any hope that the UK avoided entering a technical recession in Q4 2022, with retail set to contribute -0.05pp to the overall data. However, the MPC will likely look to this week's labour and inflation data as guiding lights to the February decision, with a 50 bps hike to 4.0% still looking the favoured move.