• December 2011 retail sales volumes: up 0.6% on the month, up 2.6% on the year

Commenting on the retail sales figures for December 2011, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“The retail sales figures for December were slightly stronger than expected. While the improvement is partly due to large pre-Christmas discounting by retailers, it is still welcome news. With these figures in mind, it is realistic to expect the Q4 GDP figures out next week to show modest but positive growth. There are serious challenges facing the economy however, and we could see at least one quarter of negative growth before the middle of this year.

“These figures provide further evidence that inflation in the high street is falling. While this trend continues, there is hope that consumer spending will stabilise and economic growth will improve later this year. But any sustained growth in the economy will have to rely on more than just consumer spending. Boosting net exports and business investment will be crucial to sustaining the recovery in the months and years ahead.

“While the government must stick to its plan to reduce the deficit, more must be done to reallocate priorities within the overall spending envelope. Businesses expect firm action in key areas such as credit easing, cutting red tape and containing increases in business rates. The MPC should support the economy by announcing an early increase in quantitative easing.”