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High street gloom continues as fears grow over UK economy | Business

High street sales in Britain slumped in December as consumers reined in their spending over the key Christmas shopping period, adding to the gloom facing embattled retailers across the country and increasing the likelihood of an interest rate cut later this month.

According to the Office for National Statistics, retail sales failed to rise for a record fifth month in a row in December as household spending in high street shops and online plunged by 0.6% from the previous month.

Sounding the alarm over the health of the economy at the end of last year as Brexit uncertainty weighed on growth, the ONS said that sales had not risen on a monthly basis since July, the longest period since records began in 1996.

Consumer spending over the final three months of the year fell by 1% compared with the previous quarter, while sales growth for the year dropped to 0.9%, below all estimates made by City economists in a Reuters poll.

The latest snapshot comes after retailers said that 2019 was the worst year for sales in a quarter of a century and follows several dire festive trading updates from major major high street chains, including John Lewis and Marks & Spencer.

Ryan Broomfield, a partner and retail specialist at the accountancy firm RSM, said: “Shoppers will have noticed the impact of store vacancies in retail parks and town centres, notably in areas which have lost large department stores and with further closures expected in 2020.”

Analysts said that political uncertainty around last month’s general election, combined with bad weather, kept consumers away from the shops, while the late timing of Black Friday – the US-inspired sales event – had brought forward some sales to November.

According to the ONS, all sectors of the retail trade, except stores selling household goods and petrol stations, recorded a decline in sales.

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Spending on food fell by 1.3% in December, the biggest monthly decline for four years.

The quantity of goods bought in department stores continued a downward trend, with a monthly slide of 1.8%, reflecting difficulties facing well-known chains including Debenhams and Beales.

Analysts said it remained to be seen if Boris Johnson’s unexpectedly decisive election victory would help to boost consumer confidence, although they warned that the December trading figures were concerning for the health of the economy.

Ed Monk, an associate director for Personal Investing at Fidelity International, said: “2019 was miserable for retailers, topped off by a dismal Christmas trading season. Today’s figures will raise further questions around how robust the UK economy really is going into the year ahead.”

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