UK inflation hurts retailers this Christmas
Despite the Christmas season, British households are spending less due to rising inflation and stagnant wages.
As Britain and the European Union make slow progress through a protracted divorce, consumer spending in the UK is slowing.
Britain's economy has grown slower than other big European economies this year largely as a result of Brexit.
A rise in inflation, caused largely by the fall in the value of the pound after the 2016 referendum decision to leave the European Union has began to have an impact on consumer confidence.
British households turned increasingly cautious in the three months to September as they raised their spending at the slowest annual pace since 2012, according to figures published by the Office for National Statistics.
"The figures confirm the pressure on households." Philip Shaw, an economist with Investec, said.
An expected the fall in inflation next year and forecasts for a long-awaited – but 10 years late – rise in wages could relieve some of the strains facing the UK economy.
Kristina Partsinevelos looks at how British retailers are struggling.