A survey of economists has revealed that the month of March was good for retail sales in the UK. An early start to the Easter holiday season meant that the consumer had more time to shop, thereby positively affecting the sales rate.
The survey shows that the sales rate may have gained 3.2 percent as compared to this time last year. Philip Shaw, chief U.K. economist at Investec Bank Ltd, said, "It's difficult to adjust the figures when you get such a move in the timing of Easter. By and large the trend is one of weaker sales growth." The March sales showed a rise of 0.4 percent from February.
Meanwhile, the Confederation of British Industry has said that retail sales have fallen to six-month low. These figures were of the last month. The Bank of England conducted a survey of 800 businesses and found that the causes for a fall in the retail sales were multifactorial. High on the list were the soaring oil prices, which have risen by 33 percent. Also responsible for this fall are the threat of higher interest rates and the general election on May 5, the Bank of England said.
Top retailers in the UK like the Kesa Electricals Plc, Woolworth’s Group Plc, Next Plc and Topps Tiles Plc have stated that rising mortgage payments and increased utility bills have affected their sales. This is reflected in the fact that for the first time in six years GUS Plc, the second-largest retailer by market value in Britain, saw a fall in it's first quarter sales target.
Europe's second-largest economy has seen a record inflation in March, the rate increased to 1.7 per cent, the highest since December 2002.However, the Chancellor of the Exchequer Gordon Brown has forecast a growth of 3 to 3.5 percent this year belying fears of a recession in the growth following the oil price rise. But economists warn that even this may not be enough for the Bank of England may to raise its lending rate from 4.75 percent. Malcolm Barr, chief U.K. economist at JP Morgan in London, says, "If we get a strong number you can talk about the MPC raising rates in May. If the numbers are really weak then the discussion about them cutting rates becomes relevant again."
Posted
on : Thu, 21 Apr 2005 00:00 GMT | Business News
By : Pippa Fielding
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