Retailers of the United Kingdom reported a surprise increase in demand in December, but expect spending to fall again in 2023 as shoppers are pressured by rising living costs, according to a Confederation of British Industry survey released on Wednesday.
The CBI's distributive trades index, which measures the percentage of retailers reporting annual sales volume increases versus falls, increased to +11 in December from -19 in November. This was significantly higher than the -21 predicted by retailers last month and the -23 median in a Reuters poll of economists.
However, retailers expect the sales balance to fall back to -17 in January.
"Any festive cheer is expected to be short-lived. Retailers are bracing themselves for the chill winds that will blow through the sector this winter, with consumer spending set to be hit hard by high inflation," CBI economist Martin Sartorius said.
A separate CBI measure, which asks retailers to compare sales to what is normal for the time of year, showed November, December, and January readings that were close to average.
In November, British consumer price inflation fell from a 41-year high of 11.1% in October, but the Bank of England expects it to remain high in the coming months and begin to fall significantly later in 2023.
Retail sales volumes excluding fuel were 5.9% lower in November than the previous year, according to official retail sales data.
The CBI polled 50 retail chains between November 24 and December 12.
(Source:www.euronews.com)