Retail sales in the United Kingdom unexpectedly stagnated last month as spending at department stores slumped the most in almost two years.
Sales including fuel were unchanged from October, when they fell 0.7 per cent, the Office for National Statistics said yesterday in London. The median forecast of 22 economists in a Bloomberg survey was for a 0.4 per cent increase.
Sales at non-specialised stores, mainly department stores, fell 1.5 per cent, the most since February 2011. The strongest growth was in electrical goods, boosted by tablet computers such as Apple's iPad.
The figures add to signs of weakness in consumer spending in the build-up to the Christmas shopping season after the Confederation of British Industry said yesterday that retail-sales growth cooled this month.
Increases in electricity and gas prices are keeping pressure on consumers as inflation continues to outpace wage gains.
"The economic outlook has got worse and consumers are probably still really uncertain," said Rob Wood, an economist at Berenberg Bank in London and a former Bank of England official. "There's no good news ahead for them in the near term."
Today's data also showed that online shopping continues to rise and now accounts for 10.8 per cent of all retail sales. Britons spent an average of £711 million (Dh4.24 billion) a week online in November, an 8 per cent increase from a year earlier.
Asos, the UK's largest online-only fashion retailer, said this month that first-quarter sales rose 30 per cent in the three months ended November 30 as it lowered prices of its own-brand label.
Sales at household goods stores surged 3.8 per cent last month from October, the statistics office said yesterday. Food sales fell 0.1 per cent in November, while sales of clothes and shoes dropped by the same amount. From a year earlier, total retail sales were up 0.9 per cent. Excluding fuel, retail sales rose 0.1 per cent last month from October and increased 2 per cent on the year.
The CBI said on Wednesday that its gauge of annual sales growth fell to 19 this month from 33 in November. Retailers' expectations for sales growth in January fell to 10. Anna Leach, the head of economic analysis at the CBI, said that "weak spending power and uncertainty over the economic outlook are likely to remain key risks to the retail sector in 2013".
The pound rose 0.2 per cent against the dollar yesterday morning, trading at $1.6275.
British inflation held at a five-month high of 2.7 per cent last month, remaining above the Bank of England's 2 per cent target.
The central bank's chief economist, Spencer Dale, said last week annual price gains were likely to remain "sticky".
Yesterday's report showed the annual retail sales deflator, a measure of changes in shop prices, fell to 0.5 per cent in November from 0.9 per cent in October. The deflator on food rose to 3 per cent from 2.7 per cent.
The Bank of England maintained its target for quantitative easing this month as officials forecast "broadly flat" growth along with continued strains from the crisis in Europe.
Policymakers also warned that the economy may shrink this quarter. GDP rose 1 per cent in the three months through September, helped by a boost from the Olympics that will unwind this quarter. The third estimate for the period will be published today.
Elsewhere, the Bank of Japan expanded its asset-purchase programme for the third time in four months, and will reconsider its objectives for inflation as the incoming prime minister Shinzo Abe urges more action to end price declines.
The bank increased the asset-purchase fund to ¥76 trillion (Dh3.32tn) from ¥66tn, according to a statement released in Tokyo.
* Bloomberg News