More confirmation that the British economy has hit a soft patch (at least). From the Financial Times:
British retail sales fell at a record annual pace in April, the British Retail Consortium said on Tuesday, providing the latest evidence that a consumer slowdown which started late last year is persisting.
The reality may not have been quite as bad as the headline number...
But the 4.7 percent fall in like-for-like sales -- the biggest since BRC records began in 1995 -- came as the busy Easter long weekend landed in March this year, leaving this April’s figures depressed compared to 2004.
The drop followed a 1.8 percent rise in like-for-like sales in March, leaving them down a more modest 0.9 percent in the past three months on a year ago. On a total basis, sales fell 1.3 percent in April.
... but, that said, the fall in demand was broad based:
“Sales in most sectors suffered, especially big-ticket items,” said BRC director-general Kevin Hawkins in a release. “A slowing housing market, pre-election economic uncertainty and the continuing threat of interest rate rises dominated consumer confidence in April.”
Sales of electrical goods and furniture, items most closely linked to the fortunes of the housing market, were hard hit.
Trade in discretionary and non-essential items was especially bad, the BRC said.
The commentary following the report was, not surprisingly, glum. From the telegraph.online:
"We are at a very interesting juncture in the economy where it is clear that we've gone down a gear since the turn of the year. And I don't think it is a temporary phenomenon," says Ian McCafferty, the [Confederation of British Industry's] chief economic advisor...
"I don't think that the slowdown is going to go away if the sun shines and the election's over," says Phil Dutton, the finance director of Matalan...
"There is no obvious single explanatory factor behind it, nor any clear future event which might trigger an improvement in sentiment," says [Alan Giles, the chief executive of HMV Group, which runs the HMV music chain and Waterstone's, the bookseller]...
[Lord Harris of Peckham, the chairman and chief executive of Carpetright] blames the lack of consumer confidence on rising bills and taxes. "We need some confidence to be built in this country and I can't see where that's going to come from," he adds.
The cautiousness of the consumer is confirmed by figures, obtained by The Sunday Telegraph, which show that the use of store cards has declined dramatically since last summer.
Gary Duncan, the Economics Editor for the London TimesOnline, adds his voice to chorus bemoaning the fate of the Bank of England:
[The retail sales report] will today reignite speculation that the Bank of England may soon be forced to cut interest rates.
After the Bank yesterday pegged base rates at 4.75 per cent for a ninth month in a row, the bleak news from the high street and industry will fuel fears over a rapid deterioration in the economy...The dilemma facing the Bank over its next move was highlighted by producer prices data indicating rising inflationary pressures. A core measure of prices of goods leaving factories is rising at a rate close to its highest in a decade.