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.’
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.