British retail sales grew at their fastest rate in more than a year during the three weeks through Dec. 13 as consumers snapped up clothing and groceries, a survey by the Confederation of British Industry (CBI) showed on Tuesday.
The CBI said its retail sales index rose to a reading of plus-35 for the period between Nov. 24 and Dec. 13, topping forecasts on investing.com for a reading of plus-20 and the highest since September 2015.
Still, the pace of expansion is not expected to be sustained as the pound’s decline since the June Brexit vote is bound to fuel inflation. The CBI’s index for expected sales growth in January dropped to a three-month low of plus-18, and retailers forecast orders to slow sharply after growing at their fastest in more than a year in December, the CBI said.
“It’s encouraging to see retailers reporting another month of healthy sales growth leading up to the festive season, which rounds off a fairly solid quarter,” said Ben Jones, CBI’s principal economist. “While we still expect to see decent growth in the near term, the pressures on retail activity are likely to increase during 2017, as the impact of sterling’s depreciation feeds through. With higher inflation beginning to weigh on households’ purchasing power, consumption patterns are likely to shift, creating winners and losers across the retail landscape.”