Disappointing retail sales figures for December 2012 have stoked fears that the UK economy may be falling back into a recession.
Figures from the Office for National Statistics showed a year-on-year increase in the quantity of goods bought at 0.3 per cent, which is the lowest level of increase in December since 1998, with the exception of December 2010, when retail sales fell sharply as a result of harsh winter weather.
In the December period, which covers the time from November 25 2012 to December 29 2012, both the quantity of goods bought and the amount spent on goods fell by 0.1 per cent.
Vicky Redwood, chief economist at Capital Economics, said: “December’s drop in the official measure of retail sales volumes confirmed that it was a fairly lacklustre festive period for the high street and provided more evidence that the UK has slipped into a ‘triple-dip’.”
Ms Redwood said the figures suggested that the preliminary estimate of fourth quarter GDP, which will be released on Friday 25 January 2013, will show that the economy contracted at the end of last year.
Last week the National Institute of Economic and Social Research (NIESR) forecast that the UK economy had contracted by 0.3 per cent in the fourth quarter of 2012.
As the economy grew in the third quarter of 2012, though, this will not mean that the UK enters a technical recession - defined as two consecutive quarters of negative GDP growth.