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UK Retail Sales Collapse in December

UK retail sales experienced their steepest decline since the Covid-19 lockdowns three years prior, intensifying concerns that the economy may have entered a mild recession towards the close of 2023. According to the Office for National Statistics, the volume of goods sold in December plummeted by 3.2%, a figure primarily attributed to consumers opting to do their holiday shopping earlier in the season and a noticeable reduction in the purchase of sports equipment, games, watches, and jewelry in the days leading up to Christmas.


This decline, the most pronounced since January 2021, far exceeded the modest 0.5% drop forecasted by economists and potentially nudged the UK economy into a technical recession for the latter half of 2023. In year over year term, retail sales were down 2.4%, the second consecutive year with a drop. Our Take: These figures are alarmingly weak, casting doubt on the recent surge in economic indicators. The influence of unique factors, such as Black Friday distortions and unusually inclement weather, might lead to upward revisions in future reports. However, these dismal retail sales statistics warrant close attention, especially if subsequent data releases confirm this downward trend.


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