Christmas, it seems, was dismal for Britain’s high streets. Figures from the British Retail Consortium, a trade body, pointed to the worst year of sales on record, partly due to a contraction in the final quarter. A clutch of retailers’ sales figures showed the breadth of the problem: John Lewis, the department store group, warned on full-year profits. Tesco, the country’s largest supermarket, saw sales fall in the third quarter compared with the previous year. The disappointing results, however, contrast with surveys which suggest the gloom is lifting following a decisive general election. Figures from Barclaycard, the payments provider, said consumer confidence jumped to its highest level in 2019. A survey of purchasing managers in the UK’s service industry by IHS Markit pointed to the highest level of confidence since 2018, as executives forecast that a stable government would lead to a rebound in orders and unlock business investment. A Deloitte survey of chief financial officers found the highest rate of confidence since 2008 — the number saying they expected to increase capital spending was the highest level since 2015.The BRC figures probably overstate the extent of the retail slowdown. Official sales figures, released next week, are likely to point to a better performance in retail overall. That is partly because those statistics have more comprehensive coverage of ecommerce, as well as timing issues related to the Black Friday sales. The trade body figures do not include data from the online shopping giant Amazon, which now accounts for about 5 per cent of all sales in the UK. Growth in spending on both measures, however, has been slowing for a while. Anecdotal evidence points to political uncertainty both over the general election result and over whether Britain would leave the EU with or without a deal. New car sales sank to a six-year low in 2019 as consumers avoided committing to big-ticket purchases in the face of such turmoil. Any return of confidence now may be short lived. Talks between European Commission president Ursula von der Leyen and Prime Minister Boris Johnson last week highlighted the potential for choppy waters ahead. Mr Johnson’s decision to rule out extending talks beyond the year-end means any agreement is likely to be minimal, rushed and last-minute. Whether or not Mr Johnson revises his position to allow for the deeper deal that would protect sectors such as aerospace, pharmaceuticals and chemicals, more uncertainty is on the horizon for large sections of Britain’s economy.Consumers have been relatively insulated from direct effects of the Brexit uncertainty so far as much of the hit to the economy has been declining business investment. Employment growth has continued — the last jobs figures released in 2019 showed the unemployment rate fell to 3.8 per cent in October, the lowest level since 1974 — and real wage growth has begun to recover after the post-crisis stagnation.The prospects for growth this year depends on whether a strong labour market can be maintained. Some economists suggest last year’s sluggish growth and falling investment will be reflected in rising unemployment this year; hiring decisions lag behind overall performance slightly. Others note that it is unlikely wage growth will continue, given lacklustre productivity growth. Higher government spending and the prospect of a global recovery as trade tensions ease are the main bull case for the economy. This means that, once again, the prospects for the UK and the sustainability of the rebound in confidence will depend on politics, trade — and the Brexit process.