UK retail spending grew at its slowest pace in seven months during December, delivering a disappointing Christmas for shops. Industry data shows consumers held back on purchases, dampening what is typically the most crucial trading period for the high street. Rising household bills and persistent inflation concerns likely forced many families to tighten their budgets, leaving less discretionary cash for festive gifts and treats.

This slowdown presents a significant challenge for retailers who depend heavily on the holiday season to turn a profit for the year. Major chains face mounting pressure on their profit margins as they were forced to run deeper discounts to lure in hesitant shoppers. The weak figures will also worry policymakers at the Bank of England, who are closely monitoring consumer demand as they assess the path for interest rates.

All eyes now turn to January's sales performance and whether this represents a temporary blip or the start of a tougher period for the UK economy.