U.K. shoppers cut back on spending as inflation takes its toll

Sales volumes were down by 5.8% compared with December 2021, the biggest fall for that month in records going back to 1997, and the ninth month in a row that they fell in annual terms.

Inflation-pinched British consumers cut their shopping by the most in the key month of December in at least 25 years, official data showed on Friday, dashing hopes for a Christmas boost for the country's flagging retail sector.

Sales volumes were down by 5.8% compared with December 2021, the biggest fall for that month in records going back to 1997, and the ninth month in a row that they fell in annual terms.

Sales unexpectedly fell by 1% from November, the Office for National Statistics said, confounding a forecast for a 0.5% monthly increase in a Reuters poll of economists.

Olivia Cross, with consultancy Capital Economics, said the surprise fall suggested that some of the resilience seen in the economy in late 2022 petered out in December.

"What's more, we think the bulk of the drag on activity from high inflation and rising interest rates has yet to be felt," she said.

A survey showed a first drop in three months in consumer confidence in January which fell back close to its lowest level since at least 1974.

Britain's economy is widely expected to fall into a recession.