United Kingdom shoppers rein in spending as sales show first drop since March

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Looking at annual growth rates, the whole of 2018 increased by 2.7% in the quantity bought; an annual slowdown in comparison with the peak of 4.7% experienced in 2016.

British consumers reined in their spending in December after splashing out during November on Black Friday promotions, according to official figures that confirmed the tough festive shopping period on the high street.

The data also suggested that the traditional trend of December outperforming November for retailers has been reversed.

James Smith, an economist at the City bank ING, said: "After another bumpy week for Brexit, today's United Kingdom retail sales data is a timely reminder that all is not particularly well in the United Kingdom economy".

It is the biggest monthly drop since May 2017, and the December fall meant that retail sales were down 0.2% in the fourth quarter of the year - the largest three-month fall since March.

December overall online sales grew by 14% on the same month a year ago, accounting for 20% of the total retailing in the month.

Trading fell in all retail sectors save food stores and petrol stations.

Household goods declined 17.9% following Black Friday promotions, which boosted sales in November 2018.

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'The extended squeeze on purchasing power has encouraged consumers to become more savvy in their Christmas shopping'.

Graeme MacLaughlin, relationship director at Barclays in Northern Ireland, said: "It's a complicated trading environment across the United Kingdom, with comparisons remaining hard due to a constantly evolving discounting season".

Meanwhile, in the three months to December, sales dipped 0.2% by volume and 0.1% by amount spent on the previous three months, with declines across all main sectors except fuel.

"While footfall figures are down in the United Kingdom, the Northern Ireland high street is bucking the trend with figures for December reporting a 4.1 per cent increase".

He added: "We have to retain some perspective as we consider the retail sector's prospects for 2019".

Heading to the High Street - real or virtual - ahead of Christmas is unavoidable.

"Yes, online is growing and having an impact on pricing, but the figures show that 80 per cent of our spending is still done in-store, so we think speculation that we're on the verge of a fundamental shift in how United Kingdom shoppers approach retail are wide of the mark".

The Centre for Economics and Business Research blamed the "suffocating effect" of Brexit uncertainty for the subdued spending, which comes at a time when employment is at a record high.

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