January 19, 2008	Saturday	Muharram 09, 1429

LONDON, Jan 18: Retail sales in Britain dipped in December from the previous month, falling in the crucial run-up to Christmas, according to official data published on Friday.

Analysts said the news stoked fresh speculation that the Bank of England could cut its interest rates by another quarter point to 5.25 per cent next month.

On a monthly basis, British retail sales slipped by 0.4 per cent in December from November, the Office for National Statistics (ONS) said. That was far worse than analysts’ consensus forecasts for a gain of 0.2 per cent.

December’s monthly decline was the biggest since January last year, when retail sales fell by 1.7 per cent.

The biggest drivers behind the monthly decline were department stores and camera and mobile phone retailers, an ONS spokesman said.

Prior to Friday’s news, British retailers were already calling for a rate cut to help boost spending amongst cash-strapped consumers, who face rocketing domestic energy bills.

“The fall in retail sales growth in December indicates that consumer spending is now increasingly faltering in the face of mounting headwinds,” said Howard Archer, chief Britain economist at Global Insight.

“This significantly intensifies the pressure on the Bank of England to cut interest rates by a further 25 basis points to 5.25 per cent in February, and we expect this to happen.”

Capital Economics analyst Vicky Redwood said the retail data demonstrated that British customers had “shunned” the high street last month.

She added: “We don’t see things getting any better from here. House prices are falling, so are equity prices, utility prices are rising, confidence is at a 12 year low ... need we go on?” Redwood agreed that the data cemented hopes of a rate cut next month.

The ONS added on Friday that on a 12-month basis, retail sales grew by 2.7 per cent in December 2007, compared with the same month the previous year, the ONS added.

That compared with a downwardly revised figure of 4.2 per cent in November 2007. Analysts had expected the rate to drop far more modestly to 3.5 per cent from the original 4.4-percent reading.—AFP