UK retail sales grow modestly in January

British retail sales grew at a modest pace in January but were weak for the time of year, with department stores struggling, an industry survey showed on Thursday.

The CBI distributive trades survey's retail sales balance fell to +12 in January from +20 in December, in line with the forecast in a Reuters poll.

Britain's economy has slowed over the past year, in part because a pick-up in inflation driven by 2016's vote to leave the European Union has eaten into consumers' disposable income.

"Household spending will remain under pressure this year from higher inflation and low wage growth, which will continue to weigh on sales growth in the retail sector," CBI economist Anna Leach said.

The CBI survey showed stores expect sales growth to continue at roughly January's pace next month - the weakest outlook in three months.

Official data last week showed British shop sales slid by much more than expected in December, capping off the weakest year for retail since 2013.

Retailers have reported mixed fortunes over the Christmas period.

Britain's biggest retailer Tesco  missed forecasts for Christmas trading as strong food sales were undermined by weak demand for goods such as DVDs and computer games. Discount supermarkets saw strong growth.
Department stores like Debenhams and House of Fraser gave downbeat reports of trading.

The CBI survey was conducted between Dec. 27 and Jan. 12 and was based on 49 retail chains.