Retail sales slump in December - CBI

Retail sales slumped in December, according to the latest data from the Confederation of British Industry, with Brexit worries to blame.

The balance of retailers reporting year-on-year growth in sales volumes fell -13% in December - the lowest level since October 2017 - from +19% in November, missing expectations of +15.

Sales volumes for the time of year were significantly below average to the greatest degree since November 2011 and were expected to remain below average in January.

Looking ahead, retailers were downbeat, with the net balance expecting sales to rise over the coming month the joint-lowest since after 2016 EU referendum.

CBI head of economic intelligence Anna Leach said: "Retailers report a sharp drop in sales volumes in the year to December, so it’s clear the sector continues to feel the impact from pressures on household incomes and digital disruption. Brexit uncertainty may also be affecting consumer sentiment and spending.

"High street shops - like other businesses - are concerned about the rising risk of a disorderly no-deal exit from the EU. Urgent action to resolve the Brexit stalemate is needed to give the retail sector confidence to make crucial decisions about investment."

Samuel Tombs chief UK economist at Pantheon Macroeconomics, said the CBI report reinforces the impression that consumers are tightening their purse strings due to ongoing Brexit uncertainty.

"The average level of the reported sales balance in Q4, +4, is well below its average in the first three quarter of 2018,+14, and its 2010-to-present average, also +14. So, while official data for November suggest that Black Friday encouraged even more consumers than last year to undertake Christmas shopping early, the overall picture is undeniably weak."