Christmas will be cheaper this year

Emma Woollacott
Pedestrian with shopping bags walking in downtown shopping area at Christmas
Pedestrian with shopping bags walking in downtown shopping area at Christmas

According to the Office for National Statistics (ONS), it's turning into a cheap Christmas, with prices falling faster than at any time in the last 12 years.

This year's Black Friday sales boom lifted sales growth to its highest level for ten years - and brought a big boost for cash-strapped consumers - with retail prices two percent lower overall than last year.

But the price cuts aren't coming just from Black Friday discounts. Food prices are down by one percent, says the ONS, confirming a recent report from the British Retail Consortium that they were falling for the first time in at least eight years.

Meanwhile, petrol prices are dropping dramatically - indeed, the RAC is predicting that the cost of unleaded fuel could soon fall to 99p a litre.

Asda's latest Income Tracker shows that, largely because of the fuel price fall, the average British shopper has £11 more left over after bills and taxes each week than they did a year ago.

But shoppers aren't pocketing the spare cash - they're spending it. During November, the ONS figures show, the value of goods sold in the UK was 6.4% higher than last year. Department stores did particularly well, with sales up 15.4%. In terms of what we bought, it seems we were keen on gadgets, with sales of electrical goods up by a third on a year ago.

"The falling cost of essential items such as fuel and food has brightened the economic environment facing UK households in recent months and freed up income for families to enjoy over the holiday season," comments Sam Alderson, an economist at the Centre for Economics and Business Research.

"With average weekly earnings beginning to strengthen and inflation likely to fall further in coming months, households look set to enjoy further boosts to spending power in the New Year."

The increase in sales may not be all that it seems, though, with Black Friday simply encouraging many people to do their shopping early - and then stay away from the shops in December.

"We need to take into account that for the last two years Black Friday has fallen in the December trading period. However, this year most of the boost provided by the biggest ever Black Friday has been felt in November," points out Ian Geddes, UK head of retail at Deloitte.

"These results highlight that a more volatile pattern of trading is emerging, where it is becoming harder to predict and therefore to plan for peak demand."

Read more on AOL Money:

Petrol price 'could fall below £1'

Shops braced for 'Panic Saturday'

Asda promises more price cuts, as cost of UK groceries falls

UK Shop Price Decline Eases In August: BRC
UK Shop Price Decline Eases In August: BRC