Official figures show that retail sales in Germany fell sharply in January as a result of the steep rise in VAT which came into effect at the start of the month.
German retail sales fell by 5.1% in January from the figure for December, the federal statistics office Destatis said in a statement. This led to an annual fall of 1.4%.
With effect from January 1, the government raised VAT by three full percentage points to 19%, the biggest single increase, in a move which experts said would weigh on consumer spending and put the brakes on the economy as a whole.
