RETAIL sales in Britain fell unexpectedly in December, official figures showed yesterday, confirming a disappointing Christmas for retailers and helping to allay fears of a runaway boom in consumer spending.
The Office for National Statistics (ONS) said retail sales fell 0.8 per cent in December, following a 0.8 per cent rise in November. Sales were 2.9 per cent higher than in December 1995, down from November's 4 per cent annual growth rate.
Economists said the data would help the Chancellor of the Exchequer, Mr Kenneth Clarke, to resist pressure from the Bank of England, which fears inflation is about to take off again, to increase interest rates and might enable him to hold rates steady until after the election.
The Conservative government, which has made Britain's economic health the central issue in its election campaign, welcomed the data, saying the underlying trend was of healthy growth in retail sales and expanding consumer spending.
Economists said the slowdown in sales suggested thrifty British consumers did not indulge in lavish Christmas spending as expected and were still reluctant to pay higher prices, despite growing confidence and job security.
"These data suggest that the consumer is still not prepared to accept significant price increases, said Bank of America economist Mr Jeremy Hawkins. "This argues against any marked deterioration in the inflation outlook even if, as seems likely, the December slide in sales proves just a temporary phenomenon.
Economists said the Chancellor would pounce on the data to ward off increasingly public calls from the Bank of England to raise interest rates from the present 6 per cent.
