Retail spending in U.K. dropped 1.9% in February, after rising 0.8% in the previous month, which lowered the annualized rate to only 0.4% from a revised reading of 3.8% in January, which is the lowest level of sale growth in more than 13 years. The data suggested that economic conditions are deteriorating at an increased pace as households face a weakening labor market, and conditions are likely to get worse as trade conditions falter. Moreover, the sales deflator showed a 0.3% annual increase versus a 0.9% drop in January, which suggests that retailers are cutting back on discounts as growth prospects deteriorate at a record pace. Meanwhile, a separate report showed that business investments in the fourth quarter fell 1.5% despite an initial forecast for a 3.9%, which raised the annual rate to -4.5% from an advanced reading of 7.7%.
