There isn’t a great deal of UK economic news to look forward to over the next seven days, the highlight being official December retail sales due on 19 January.

If reports from supermarkets and high-street retailers are any guide, shoppers spent more freely on groceries than last year, and bought more items than usual, while general merchandise and clothing sales performed less well.

That seems to be backed up by the latest survey by consultants KPMG and the BRC (British Retail Consortium), which showed December retail sales up 1.7% against a 6.9% rise the previous year with both in-store and online non-food sales falling.

According to the BRC head of UK retail Paul Martin, ‘The festive feel-good factor was lacking this year as many retailers faced a disappointing December with sales only up 1.7%. Christmas shoppers ditched clothing, jewellery and technology gifts, opting for beauty, health and personal care products, which, along with food and drink drove festive sales this year.’

Despite a slowdown in inflation, an upcoming cut in national insurance rates and some consumers having more money in their pockets this Christmas than last, ‘the constant drip of economic challenges over the last two years has finally come home to roost’ said Martin.

In the Eurozone, where the ECB is seen as likely to be the first central bank to start cutting interest rates, the focus will be firmly on consumer prices.

November’s annual inflation figure of just 2.4% was better than forecast and the best reading since July 2021, so a lower figure for December could unleash animal spirits after a lacklustre performance for Eurozone stocks on the whole last year.

In the US, after December’s inflation figure came in marginally above expectations, the next major test for the market will the durable goods data and fourth-quarter GDP reports on 25 January, where bad news economically-speaking is likely to be hailed as good news if it puts the chance of an early rate cut back on the table. 

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