Recent retail sales data provided the final piece in a pretty mediocre jigsaw for the UK economy this week. Contributor Ben Brettell, Senior Economist – Hargreaves Lansdown.

Inflation data and wage growth figures confirmed the squeeze on household incomes continues. But so far the UK consumer has proved surprisingly resilient, and retail sales have held up better than many expected.

We’ve been waiting for the pay squeeze to filter through to the high street, and at first glance today’s numbers aren’t good news on that front. A decline of 0.3 percent is the first annual drop since March 2013. But the numbers aren’t as bad as they look. A 0.3 percent drop is better than the 0.6 percent fall which was forecast.

The monthly figures are volatile, and October 2016 was an exceptionally strong month, so the comparatives are tough. The rolling three-month figures still show an underlying trend of growth. As ever with retail, the Christmas period, which kicks off with Black Friday on 24 November, will be crucial.

The Bank of England says household consumption growth will slow from 1.5 percent to one percent in real terms next year, but that business investment and exports should pick up the slack in terms of aggregate demand. The overall picture remains lacklustre, but not disastrous.