London - UK Chancellor of the Exchequer Philip Hammond told a Davos gathering on Friday that an inflation pickup will put a damper on consumers this year. The first signs may already be appearing.
Less than an hour before Hammond spoke, data showed retail sales fell at the fastest pace in almost five years in December, recording a 1.9% drop that far exceeded even the most pessimistic forecasts in a Bloomberg survey.
Possible explanations include price increases and consumers scaling back purchases after taking advantage of Black Friday discounts the previous month. Mild weather also probably affected clothing sales - down 3.7% on the month - though the weakness in the sector was broad-based, with turnover at food, household goods and department stores all falling.