Rising prices for fuel and food are thought to be behind a fall in UK retail sales in January, the Office for National Statistics (ONS) said on Friday.
Official figures show that the quantity bought in the retail industry in January 2017 declined by an estimated 0.3% compared with the prior month. Both online and in-store sales were lower in January than in December.
Year-on-year, the quantity bought is estimated to have increased by 1.5% — the lowest growth since November 2013.
Meanwhile, the underlying pattern as suggested by the three month on three month movement decreased by 0.4%.
“In the three months to January, retail sales saw the first signs of a fall in the underlying trend since December 2013,” said ONS senior statistician Kate Davies. “We have seen falls in month-on-month seasonally adjusted retail sales, both in conventional stores and online, and the evidence suggests that increased prices in fuel and food are significant factors in this slowdown.”
The drop in retail sales during January followed the sharp fall recorded in December.
“The failure of retail sales in January to rise at all after December’s 2.1% month-to-month drop demonstrates that consumers’ spending has shifted down several gears in response to slowing employment growth and rising inflation,” said Samuel Tombs of Pantheon Macroeconomics, quoted by the Financial Times.
Ruth Gregory from Capital Economics, quoted by the BBC, commented: “January’s surprise fall in the official measure of retail sales volumes has brought the recent run of resilient economic news to an abrupt end. And the rest of the year is shaping up to be tough on the high street, given the expected squeeze on consumers’ real pay growth.”
Earlier this week, figures from the ONS showed that inflation in January climbed to its highest level in two and a half years.
The Consumer Prices Index (CPI) rose by 1.8% in the year to January 2017, compared with a 1.6% rise in the year to December 2016.