U.K. Holiday Retail Sales Fell Unexpectedly

“U.K. retail sales unexpectedly fell in December as consumer uncertainty extended into the key Christmas trading season for British stores.

Sales including fuel declined 0.1 percent from November, when they stagnated, the Office for National Statistics said today in London. The median forecast of 22 economists in a Bloomberg News survey was for a 0.2 percent increase. Household goods fell the most in almost three years. From a year earlier, total sales rose 0.3 percent.

The data underscores the weakness of Britain’s high streets in a week that saw HMV Group Plc (HMV), the U.K.’s biggest seller of CDs and DVDs, and movie rental chain Blockbuster Entertainment Ltd. enter administration. GfK NOP’s measure ofconsumer confidence fell in December as the economy struggled to recover from a recession. Some of the nation’s largest utilities have raised electricity and gas prices, squeezing households.

“The festive period was fairly lackluster for the high street,” saidVicky Redwood, an economist at Capital Economics in London. “With consumers’ real pay still falling, demand is unlikely to improve in the foreseeable future.”

Excluding December 2010, when cold weather curbed consumer spending, the annual increase in sales last month was the weakest for a December since 1998, the statistics office said.

The pound extended its decline against the dollar after the report. It was trading at $1.5936 as of 11:40 a.m. in London, down 0.4 percent from yesterday….”

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