Britain's economic recovery in doubt after fall in January retail sales

The BRC said that on a total basis retail sales increased 1.2 per cent against a 3.2 per cent increase in January the previous year.

This year’s decline in sales was attributed in part to the heavy snow which struck for much of the first month of the year. Sales of food goods actually increased during the cold spell as consumers stocked up to weather the winter. However non-food sales, especially of discretionary items declined.

Once the weather improved the trend started to reverse, with food sales dropping and non-food sales making a “partial recovery”.

Sales made by telephone, mail-order and internet were up 14.6 per cent from the previous year, again partly encouraged by the snow.

The fall in sales has also been partly attributed to the government putting VAT back up to 17.5 per cent at the start of the year.

The fall in retail figures may cause concerns about the state of the British economic recovery. Two weeks ago the country officially exited recession in the last quarter of 2009, but only with 0.1 per cent growth. The figure could still be revised up or down and there are concerns that even if the figure remains unchanged there could still be a “double-dip” recession when the next set of quarterly GDP figures are published in April.

The possibility of Britain officially going back into recession in April has led to some speculation that the Prime Minister may call a general election earlier than the expected date of 6 May.