UK retail is suffering its lowest growth since November 2013. Latest Office of National Statistics (ONS) sales figures show a modest 1.5% increase in January, compared to January 2016.

Month-on-month sales actually declined 0.3% versus December 2016 figures as inflation rears its head on the high street.

‘Whilst the reading on its own shows only a marginal decline, it comes on the back of a drop of 1.9% previously and could raise some question marks over the levels of consumer spending in the economy’ comments XTB analyst David Cheetham.

ONS senior statistician Kate Davies says: ‘We have seen falls in month-on-month seasonally adjusted retail sales, both in conventional stores and online.’

‘The evidence suggests that increased prices in fuel and food are significant factors in this slowdown.’

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Respected retail commentator Nick Bubb believes the figures are weak because the ONS revised its estimates higher for small retailers. Over the three months to January, sales were down 0.4%.

Online sales proved a bright spot. Internet shopping figures rose approximately 10% year-on-year, but are unsurprisingly down 7.2% on December's Christmas-boosted figure.

The knock effect sees the pound weaken versus the dollar, losing roughly 0.64% on pre-announcement highs of 113.476. Sterling is currently trading at 112.75.

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Issue Date: 17 Feb 2017