UK Retail Economic Briefing Report summary
January 2021
Period covered: Period covered: 01 Dec 2020 – 31 Dec 2020
Note: Reporting periods are either one month or two months behind the current month as standard.
Following six consecutive months of growth, GDP fell by 2.6% in November as increased coronavirus restrictions across the UK reduced activity within the economy.
GDP remains 8.9% lower than the level seen before the full impact of the pandemic in February. In the 12-months to November, GDP declined by 8.9%.
CPI inflation accelerated in December, rising by 0.6% year-on-year, up from the 0.3% rise in November and above market expectations of a 0.5% rise.
Inflation saw modest rises in December caused by upward pressure from Clothing and Transport costs. Nevertheless, inflation is likely to remain subdued in early 2021 due to ongoing lockdown restrictions.
Average regular pay rose by 3.6% year-on-year in the three months to November.
Retail sales rose by 0.8% in December, year-on-year, according to the Retail Economics Retail Sales Index (value, non-seasonally adjusted, exc. Fuel).
Food sales rose by 7.2% in December, while home related products remained resilient with DIY & Gardening (+12.5%), Homewares (+2.8%) and Electricals (+2.7%) also enjoying positive growth on last year.
GfK’s Consumer Confidence measure stood at -28 in January – marking a dip on December’s -26 and a drop of 19 points compared to a year earlier.
All measures within the index declined compared to the previous month, except for perceptions around personal finances over the past year.
Despite hopes of a ‘return to normal’ as the vaccine programme rolls out, forward looking measures of consumer confidence as well as the major purchase index suppressed the overall index in January.
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Source: Retail Economics
