UK shoppers rein in spending as sales show first drop since March

LONDON, Jan 18 (Reuters) – – British retail sales fell for the first time since March during the three months to December, confirming a slowdown in consumer spending as Brexit draws near, official data showed on Friday.

Retail sales volumes fell 0.2 percent in the fourth quarter after a 0.2 percent rise in the three months to November.

Friday’s data chimed with other signs that consumer spending is cooling after a strong summer, fuelled by warm weather and the soccer World Cup.

In December alone, sales fell 0.9 from November and were 3.0 percent higher than a year earlier, below economists’ forecasts in a Reuters poll for a 0.8 percent monthly drop and a 3.6 percent annual gain.

A survey last week from the British Retail Consortium showed retailers failed to increase their Christmas sales for the first time since the depths of the global financial crisis a decade ago.

Supermarkets Sainsbury’s and Morrison both missed Christmas sales forecasts, but rival Tesco beat expectations and clothing retailer Next and department store John Lewis both reported a late surge in demand.

Britain’s scheduled departure from the European Union on March 29, with no clarity yet on whether it can leave with a transition deal, has weighed on consumer confidence.

But there has been some comfort for households in recent data which has shown the fastest growth in underlying pay growth since 2008 and inflation falling to an almost two-year low of 2.1 percent.

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