British retail sales fell more than expected ahead of Christmas

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British retail sales plummeted in December, marking the biggest decline in nearly three years and raising concerns about the health of the economy at the end of last year.

The quantity of goods bought in Great Britain fell 3.2 per cent between November and December, reversing a 1.4 per cent increase in the previous month, the Office for National Statistics said on Friday.

The decline was much steeper than the 0.5 per cent fall forecast by economists polled by Reuters, and was the largest monthly fall since January 2021 when coronavirus restrictions hit sales.

“Following a strong November, retail sales plummeted in December with all types of outlets being hit,” said Heather Bovill, ONS deputy director for surveys and economic indicators.

The fall was driven partly by people doing their Christmas shopping early particularly during the Black Friday sale period in November, the ONS said. Economists also blamed high prices and borrowing costs for damping consumer confidence.

The poor reading increased the risk that the economy could have marginally shrunk at the end of last year and entered a technical recession, following a 0.1 per cent contraction in the three months to September.

The ONS figures provide an early indication of the performance of the consumer sector in a key month for spending. Data on the UK’s economic growth in the final quarter of 2023 will be released on February 15.

“Today’s release would subtract around 0.15 percentage points from real GDP growth in December, which increases the chances the economy may have ended 2023 in the mildest of mild recessions,” said Alex Kerr, economist at Capital Economics.

He said that as well as consumers bringing forward their festive purchases into November, sales also fell due to “drags from the cost of living crisis and sharp rise in interest rates” which were “still…