By Wiktor Szary and David Hodari
LONDON--U.K. retail sales slowed at the fastest monthly rate in nearly five years in December, data showed Friday, signaling Britons may have become less keen to part with their cash as the year drew to a close.
The retail sector contracted by 1.9% from the previous month, the sharpest slowdown since April 2012, the Office for National Statistics said. Analysts polled by The Wall Street Journal predicted only a slight contraction.
The slowdown was driven mostly by a fall in sales in household goods as well as clothes and shoes. Compared with December 2015, sales rose 4.3%, also below analysts' expectations of 7.0% growth.
U.K. shoppers appeared largely unfazed by the prospect of Britain's exit from the European Union in the wake of the June 23 referendum, with sales growing strongly over the summer and hitting a 14-year annual high in October.
But economists say that stirring inflation and a widely anticipated slowdown in the job market could deter consumers from spending in the months ahead. Consumer inflation accelerated to a two-year high in December.
Some analysts also expressed concern that British households were increasingly turning to debt to keep the economy motoring, creating a potential vulnerability as the U.K. government prepares for complex EU exit negotiations with Brussels. Britons' unsecured borrowing hit a near 12-year high in November, the BOE data showed.
Write to Wiktor Szary at Wiktor.Szary@wsj.com and David Hodari at David.Hodari@wsj.com
(END) Dow Jones Newswires
January 20, 2017 04:55 ET (09:55 GMT)
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