UK retail sales slip due to January snowfall

| February 19, 2010 | 0 Comments

As expected, the snowy and icy conditions experienced in the UK in January has resulted in a fall in retail sales.

The severe wintry weather drove shoppers away from the High Street and resulted in a 1.8% fall in retail sales - the sharpest drop in 18 months.

The official figures, from the Office for National Statistics, were more than three times what analysts had forecast and raise concerns about the fragile state of the economy.

The period covers the first month since VAT reverted back to the rate of 17.5% after a temporary rate of 15%.

Meanwhile, on an annual basis, sales by value were up 0.9% from January 2009.

In the meantime, fuel sales dived by 11.1% on the month as motorists opted to leave their cars at home. When the impact of car fuel sales were stripped out, overall retail sales declined by 1.2%.

The ONS said the cold weather had boosted clothing sales, but food sales fell by 2.4%. The heavy snow also affected the sales of household goods, which fell by 13.4% in January - the biggest drop since January 1988.

Commenting on the figures, Jonathan Loynes, chief European economist at Capital Economics, said: “January’s retail sales figures round off a pretty awful week for news on the UK economy.

“Of course, we knew the January sales figures would be bad after the VAT rise and bad weather. But the drop is even worse than the retail surveys had suggested,” he added.

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