UK retail sales rise 1.2 pct in January

posted: 19 HOURS 45 MINUTES AGO

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LONDON -Britain's struggling economy showed more lackluster indicators Tuesday, with imports rising faster than exports in December despite the falling value of its currency and retailers reporting a slow start to the year.

The Office for National Statistics said Britain's trade deficit rose to 3.3 billion pounds ($5.1 billion) in December from 2.9 billion pounds in November. Excluding oil, exports were up 1 percent in December compared to November and imports were 4.5 percent higher.

That was a disappointment, given that a weaker pound should have make exports more competitive, and imports more expensive. Britain's economy barely crawled out of recession in the fourth quarter of last year, showing 0.1 percent growth.

"It looks unlikely that net trade is in a strong enough position to offset the looming weakness in the public and consumer sectors," said Vicky Redwood, economist at Capital Economics.

Retailers also reported a disappointingly slow start to the year as sales posted their small year-on-year gain in 15 years.

The British Retail Consortium reported that retail sales rose 1.2 percent in January compared to a year earlier, the poorest January sales growth in 15 years.

Cold and snow cut into sales volumes, and analysts believe consumers had accelerated their buying in December to beat an increase in the sales tax that took effect in 2010.

Same-store sales, factoring out stores' openings and closings, were down 0.7 percent in January, the poorest result in 14 years, the BRC said.

Stephen Robertson, the Consortium's director-general,said it was "an awful start to the year and in stark contrast to an upbeat December."

2010-02-09 05:32:11