Retail sales figures are always a great indicator of how the economy is doing.
They tell us how much people are spending in the shops on our highstreets.
Forecasters in the city had predicted a drop in sales this December by 0.8 percent, but were surprised to see the sales actually fell by 1.5 percent.
This figure came from the Office of National Statistics (ONS), who report retail figures every year.
The annual growth in sales has now fallen to just 1.4 percent, which is far below the 3 percent prediction city analysts had come up with previously.
One of the possible causes for the reduction in spending on the high street this Christmas could be the rising rate of inflation. Inflation has been rising steadily since mid-2015, and recently reached its highest point in six years. The current rate is 3.1 percent, well above the Bank of England’s goal of 2 percent.
Another possible reason could be a change in how consumers spend around the festive period. With strong spending growth in November, at 0.8 percent (ONS), it could be the case that more consumers are taking advantage of the Black Friday deals when thinking about Christmas shopping, and spending their money earlier than they used to. There is, of course, the question of the larger trends in the economy. This fall in sales could be a sign that the economy is beginning to slow, with a turndown on the horizon. It’s probably too early to say at the moment, but this could be a symptom of slowing growth and falling consumer confidence, which spells trouble for the UK economy.