Retail sales were boosted by Christmas shopping in early December, hitting their highest level since September 2015.
Clothing and grocers performed best in the sector, but 53 of the 112 firms surveyed by the CBI saw sales volumes well above average.
However, the CBI added that growth is likely to slow somewhat in the year to January as the weaker pound makes imports more expensive. Meanwhile, orders placed on suppliers rose at the fastest pace in over a year, but are again expected to be broadly stable in January.
Internet sales volumes continued to rise at a robust pace in the year to December, with the survey balance at its highest since November 2014. Wholesaling also reported the strongest volume growth for almost a year-and-a-half in the year to December.
Ben Jones, CBI Principal Economist, commented on the figures:
“It’s encouraging to see retailers reporting another month of healthy sales growth leading up to the festive season, which rounds off a fairly solid quarter.
“While we still expect to see decent growth in the near term, the pressures on retail activity are likely to increase during 2017, as the impact of sterling’s depreciation feeds through.
“With higher inflation beginning to weigh on households’ purchasing power, consumption patterns are likely to shift, creating winners and losers across the retail landscape.”
Last week’s official data showed a surprising slowdown in sales in November, despite a boost from Black Friday sales.
Further figures from department store John Lewis, released last Thursday, showed 0.4 percent boost in spending in the year to December 17th.