By Marcus Leach

Figures released today (Friday) by the Office for National Statistics (ONS) show that UK retail sales volumes rose by 0.6% in December.

The ONS data also revealed that sales rose by 2.6% over the year to December.

Key Highlights

- Value of retail sales in December 2011 showed an increase of 6.2 per cent compared with December 2010.

- Sales volumes in December 2011 increased by 2.6 per cent compared to December 2010.

- Sales volumes were driven by predominantly automotive fuel and textile, clothing and footwear stores increasing 11.2 per cent and 6.3 per cent respectively from December 2010, which was impacted on by harsh winter weather.

- Offsetting the growth in sales volumes were household goods stores and other stores which decreased 3.6 per cent and 1.9 per cent respectively.

- The year on year implied price deflator continued to slow in December 2011 to 2.4 per cent from its peak at 5.2 per cent in August 2011.

“It was always going to be a tough December for retailers and this has been exemplified by the poor results announced by HMV and Tesco," Jeremy Cook, chief economist at foreign exchange company, World First, said.

“Sales have held up well, however, and while this points to relatively flat GDP in Q4 it should be enough to keep us away from negative territory.

“The key takeaway for the Bank of England will be store-price inflation coming in at 2.4%, the lowest level in 16 months.

“The inflationary fall should allow the Bank of England to keep monetary policy loose and conditions fertile enough for the green shoots of recovery to grow, or so the theory goes. 2012 is still going to be a difficult year.”

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