U.K. Shoppers Stay at Home as They Prepare for Higher Prices

British retail sales fall in January, figures released by the British Retail Consortium show, as consumers prepare for higher prices and focus on buying essentials. 

Inflation accelerated to 1.6% in December, according to figures from the Office for National Statistics, the biggest rise for two years.

Retail Economics, a research group, has predicted inflation could hit 3% this year, above the Bank of England's target of 2%. The central bank said it had some tolerance for inflation sitting above the target.

"With consumer price inflation beginning to kick in alongside retailers' costs also rising, the sector will need to continue to examine its cost base, as this will be a vital element of success in 2017," KPMG U.K. Head of Retail Paul Martin said in a statement.