The U.K. consumer finally appears to be cracking — potentially taking Britain’s economic strength with it.
Retail sales unexpectedly fell for a third month in January, calling into question the key component of the economy’s recent momentum. The decline left both the three-month and annual rates of growth at the slowest in more than three years.
The figures may be the beginning of a predicted cooling in household spending as Britons find their purchasing power eroded by faster inflation. Its materialization confirms the warnings from Bank of England Governor Mark Carney that consumers will falter this year, one of the “crucial” judgments he’s cited for keeping interest rates at a record low even as the economy expands and price growth accelerates.
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Craig Erlam
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