Fuel sales in the UK dropped to their lowest in two years last month, blamed on the biggest price jump since 2011.
The drop in sales will add to fears that rising inflation will weigh on consumer spending next year, with the Bank of England forecasting inflation will continue to rise during 2017 to 2.7 percent and remain above the two percent target until 2020.
Some expect the inflation fire hose to add as much as four percent, however. Earlier this week November’s Consumer Prices Index (CPI) inflation rate was found to be the highest since October 2014, hitting 2.2 per cent.
According to data out this morning from the Office for National Statistics, the international shopping frenzy Black Friday boosted some sales, but the overall rate of growth slowed from October’s 14-year high.
Electronics did especially well as customers rushed to snap up deals before the inevitable price rises next year on the back of the drop in the value of the pound.
More-or-less in line with expectations, retail sales volumes — including fuel — were 5.9 percent higher than a year earlier in November, down from October’s 7.2 percent, which was the strongest since 2002.
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Economists are concerned that the pull back in fuel purchases means that as inflation ticks higher people will spend less.
But how closely should we be paying attention to the UK’s fuel consumption? And is it a good measure of economic revival?
Fuel consumption in the UK is falling, and has been doing so for some time. Sales of petrol peaked at 33bn litres in 1990.
We can also see the that trend is in line with the fall in the total amount of oil consumed in the UK.