UK retail sales volumes tumbled in January – defying City expectations of a rise – according to official figures that added to worries over the state of the economy.
Howard Archer, chief UK economist at consultancy IHS Global Insight, warned the fall in sales was a "significant dent to growth hopes" for the first quarter.
UK gross domestic product fell 0.3% in the fourth quarter of 2012. A further fall this quarter would mean the third recession for the UK economy since 2008.
The Office for National Statistics (ONS) reported yesterday that sales volumes fell 0.6% on a seasonally-adjusted basis last month.
It cited feedback that heavy snow hit small food retailers in the second half of January. But the City had forecast a 0.4% month-on-month rise in retail sales volumes in January in spite of the wintry weather.
And the fall in retail sales volumes in December was revised yesterday by the ONS from 0.1% to 0.3%.
Comparing the November to January period with the preceding three months, retail sales volumes were down 0.8%. This was the weakest three-month-on-three-month comparison since March 2010. And sales volumes in January were down 0.6% on the same month of 2012 – the worst year-on-year comparison since last spring.
The ONS figures showed food sales fell 1.6% month-on-month in January.
Non-food sales rose by 0.6%. Volumes in the non-specialised category, which includes department stores, jumped 1.6% but sales of household goods fell 0.3%.
The ONS sales figures paint a weaker picture than the British Retail Consortium's survey for January.
Samuel Tombs, UK economist at consultancy Capital Economics, said: "January's surprise fall in the official measure of retail sales volumes has brought the recent run of better economic news to an abrupt end. While most of this weakness appears to have reflected the impact of the month's heavy snow, the underlying trend in retail sales still seems to be flat."
He added: "The rest of 2013 looks set to be tough for retailers, given the likelihood of a further significant squeeze on real pay and a weaker jobs market. We continue to think sales volumes will do no better than hold steady this year."
While noting the impact of snow, Mr Archer said it nevertheless appeared that "consumers are currently reluctant to spend".