Retail sales slide over Christmas amid Omicron, as inflation fears hit UK consumer confidence – business live | Business

Just in: Retail sales in Great Britain tumbled last month as the introduction of Covid-19 restrictions hit spending over the crucial Christmas period.

Retail sales volumes fell by 3.7% in December 2021, the Office for National Statistics reports.

Spending fell as shoppers kept away from high streets and shopping centres following the discovery of the Omicron variant, and following a rise in November as some people finished their Christmas shopping early.

Sales at non-food stores, such as department stores, clothes outlets and household goods sellers were hit hard, the ONS says:

Clothing stores and department stores reported a fall of 8.0% and 6.3% over the month and were 7.2% and 10.6% below levels in February 2020.

The volume of household goods stores sales fell by 3.2% in December and were 1.4% below their levels in February 2020.

Some retailers said the the Omicron variant, which increased rapidly during December, had hit shopper visits, the ONS reports.

Sales of petrol and diesel fell by 4.7%, as people were asked to work from home if they could.

Food store sales volumes fell by 1.0% in December 2021; but despite that drop, volumes were 2.0% above levels in February 2020.

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UK consumer confidence has slumped to its lowest level in almost a year, as people grow more fearful of inflation, fuel bills and interest rate rises.

A closely watched gauge of consumer sentiment, from research company GfK, fell by four points to minus 19 in January, the weakest since last February during the last lockdown.

People are less optimistic about their own financial position, and the wider economic climate, due to rising bills and likely interest rate rises.

Joe Staton, Client Strategy Director, GfK warns that the squeeze will last for months.

“The UK’s financial pulse weakened further this January driven by concerns over personal finances and the general economic situation.

“All five measures are down in January and the picture on the economy is especially bad with an eight-point decrease in how we see the past year and the year to come. Despite some good news about the easing of Covid restrictions, consumers are clearly bracing themselves for surging inflation, rising fuel bills and the prospect of interest rate rises.

“The four-point fall in the major purchase index certainly suggests people are ready to tighten their belts. Will the mood brighten when the latest wave of the pandemic subsides and Covid numbers improve? It seems unlikely because it’s the cost-of-living squeeze that’s worrying us now and this will affect us for months to come.”

Also coming up today

Stock markets are edgy, after Netflix warned last night that its subscriber growth would slow substantially in the current quarter. This downbeat forecast sent its share plunging 20% in afterhours trading:

European markets are set to fall by between 1% and 2%:

Bank of England policymaker Catherine Mann will give a speech on inflation, while the final day of ‘virtual Davos’ will hear from Australia’s PM Scott Morrison, ECB chief Christine Lagarde, IMF chief Kristalina Georgieva, and US treasury secretary Janet Yellen.

The agenda

• World Economic Forum’s Davos Agenda
• 7am GMT: UK retail sales for December
• 1pm GMT: Bank of England policy maker Catherine L Mann gives a speech ‘On returning inflation back to target’
• 3pm GMT: Eurozone consumer confidence