"The underlying picture is that the economy is bouncing along the bottom, so weather disruptions can easily tip it into negative territory"
- Rob Wood, a London-based economist at Berenberg Bank
British retail sales dropped unexpectedly last month, as cold weather kept consumers at home and incomes remained under pressure, hurting spending on food, household goods and auto fuel. The report by the Office for National Statistics showed that sales including fuel fell 0.6% from December, when they dropped a revised 0.3%. In the meantime, sales in the food sector tumbled 2.6% from a year ago and reached the lowest level since April 2004. Sales of household goods lost 0.3% from the last month of 2012, sales of auto fuel declined 2%, while sales of clothing and footwear rose 0.4%. Earlier this month, Bank of England Governor Mervyn King said that consumer prices in the U.K. are expected to accelerate in the coming months.
"The underlying picture is that the economy is bouncing along the bottom, so weather disruptions can easily tip it into negative territory," said Rob Wood, a London-based economist at Berenberg Bank.
"If you define Christmas sales as the November to January period, this has been the second worst performance over the festive/sales period over the past 15 years," said George Buckley, chief UK economist at Deutsche Bank, adding that 2009-10 was the worst.
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