UK retail sales fell unexpectedly in Jan -CBI

British retail sales volumes unexpectedly fell at their sharpest annual pace in 5 months in January as freezing weather and the reversal of the VAT cut depressed demand, a survey showed on Wednesday.

The Confederation of British Industry's monthly distributive trades survey reported sales balance fell to -8 in January from +13 in December, confounding forecasts for a reading of +8 and below retailers' own expectations for a balance of -2.

"The big freeze kept many shoppers away from the January sales and the VAT hike has hit bigger purchases like furniture and electricals," said Andy Clarke, chief operating officer of Asda <WMT.N> and chairman of the survey panel.

"2010 has opened on a weak footing, especially compared to the tail end growth of 2009, but the picture should stabilise in February."

The expected sales balance for February was -1.

A temporary cut in value added tax was reversed on Jan. 1.