There are hopes data which showed retail sales volumes fell by 3.2 per cent in December will push the Bank of England to cut rates sooner.
Experts have urged the central bank to think about cutting rates in a bid to stimulate the economy.
In December, the Bank of England held rates at 5.25 per cent for a third month.
Data from the Office for National Statistics showed retail sales volumes are estimated to have fallen by 3.2 per cent in December 2023, from a rise of 1.4 per cent in November 2023.
Michael Field, European market strategist for Morningstar, said: “UK retail sales ultimately proved a disappointment in 2023. While November’s rise in sales gave us hope, that was soon dashed in December, with the largest monthly decline since the pandemic.
“This has completely changed the picture for 2023, with retail sales now having fallen by 2.4 per cent over the period.
"This is not a great result, and despite GDP being positive over the same period, it is a clear sign that the UK economy is struggling."
Justin Moy, managing director at EHF Mortgages hoped the latest figures meant the Bank of England would cut the base rate soon.
He said: "If there was any doubt about the state of our economy, this appalling data has removed it. The economy is hanging on by a thread.
"These figures highlight the plight of both consumers and the hundreds of thousands of retail businesses that are under frankly relentless pressure.
"Whilst this is terrible news, the only positive is that this should encourage the Bank of England to cut rates sooner, and that will likely apply downward pressure on swap rates to fall, reducing mortgage costs overall. Recovery is urgently needed and the Bank of England need to react quickly."
Elliot Culley, director at Switch Mortgage Finance called on the central bank to think carefully about its next move.
He said: "The bleak December figures reveal what we have all known for a while, namely that the economy is in a seriously bad way.
"Income is being stretched to breaking point and the Bank of England needs to think carefully on how to respond and not be blinded by a slight uptick in inflation earlier this week.
"Our economy is in disarray and the Bank of England appears blind to it."
The retail data comes in the same week it was announced inflation rose to 4 per cent in the year to December 2023, up from 3.9 per cent the month prior.
According to the ONS this was mainly due to tobacco and alcohol prices increasing.
Thanks to the Newspage community for sharing their thoughts with FT Adviser.
tara.o'connor@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
