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British retail sales unexpectedly contracted in December, falling short of analysts’ forecasts and deepening fears over the outlook for UK economy.
The quantity of goods bought fell 0.3 per cent between November and December, following a 0.1 per cent rise in the previous month, the Office for National Statistics said on Friday.
The figure compared with a 0.4 per cent increase expected by economists polled by Reuters.
The figures are the first official economic data for December, and deal a fresh blow to chancellor Rachel Reeves, who is under pressure to rebuild confidence in her fiscal and economic plans.
They also come a day after official data showed the economy grew 0.1 per cent in November, snapping two months of contraction but falling short of the 0.2 per cent expansion expected by economists.
In the three months to December, which covers the busiest period of the year for retailers, sales volumes fell 0.8 per cent compared with the previous three months.
Declines at supermarkets were offset in part by a rise in non-food stores, such as clothing retailers, which rebounded from falls in previous months, the ONS said.
Following the release of the figures, the pound dropped 0.5 per cent to $1.218.
ONS senior statistician Hannah Finselbach said December’s fall “was driven by a very poor month for food sales, which sank to their lowest level since 2013, with supermarkets particularly affected”.
She added: “With the timing of Black Friday falling within these latest data, our figures when not adjusted for seasonal spending show overall retail sales grew more strongly than in recent Decembers.”