"The economic outlook has got worse and consumers are probably still really uncertain"
- Rob Wood, an economist at Berenberg Bank
Retailers in the U.K. failed to sell more goods in November than in the previous month, adding to concerns that the economy may shrink in the last quarter of 2012. According to the Office for National Statistics, retail sales, which include fuel, were unchanged from October, when they dropped 0.7%. Analysts, however, expected a reading of 0.3% on a monthly basis and a 1.4% on an annual basis. The figure adds to signs of weakness in consumer spending ahead of Christmas. As retail sales account for about a fifth of U.K. gross domestic product, the U.K. economy is expected to contract again, after it returned to growth in the third quarter of this year, following a nine-month period of contraction in a row.
"The economic outlook has got worse and consumers are probably still really uncertain," said Rob Wood, an economist at Berenberg Bank in London and a former Bank of England official. "There's no good news ahead for them in the near term."
"Retail sales volumes will need to rise by 1.7% month-on-month in December just to stop sales from falling overall in the fourth quarter...this is looking an extremely tall order," Howard Archer, an economist at IHS Global Insight, said in a note.
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