European stock markets closed slightly lower Friday, erasing gains through the morning and previous session.
U.K. retail sales disappointed Friday, coming down by 3.2% in December, significantly more than expected. It was the largest monthly fall since January 2021, when pandemic measures restricted sales, the Office for National Statistics said.
European stocks close slightly lower
European stocks provisionally ended down 0.3% on Friday, with major bourses and sectors pointing in opposite directions.
Technology stocks led the losses, down 1.4%, while technology stocks rose 0.6%.
UK retail sales fall, raising recession risk
U.K. retail sales dropped significantly more than expected in December, in a sign that the economy may have entered a shallow recession in the second half of 2023.
The Office for National Statistics said sales volumes fell by 3.2% during the key trading month, after a 1.4% rise in November. Economists polled by Reuters had expected a fall of just 0.5%.
“Today’s release would subtract around 0.15 percentage points from real GDP growth in December, which increases the chances the economy may have ended 2023 in the mildest of mild recessions,” said Alex Kerr, assistant economist at Capital Economics.
The British pound was 0.25% lower against the U.S. dollar and 0.27% lower against the euro, while U.K. bond yields nudged lower.