Retail sales slowing
No need for early rate rise, says CBI
June 5 2002
Consumer spending is slowing down, reducing inflationary pressure in the UK economy, says the CBI.
The CBI’s Quarterly Distributive Trades Survey shows a slowdown in the growth of spending, as well as continued pressure on retail prices in the face of fierce competition and weakening demand. Prices rose at the slowest rate for 15 months and are expected to slow further in the year to June.
The CBI says this significantly reduces the likelihood of inflation, the main factor behind a widely expected interest rate rise increase.
Alastair Eperon, chairman of the DTS Panel and a director of Boots, said: “All the evidence in today’s survey points to a gradual slowdown in consumer spending. With prices rising at the slowest rate for fifteen months, inflationary pressures are diminishing. There is no necessity for the Bank of England to increase interest rates tomorrow.”
Despite the slowdown in growth and the pressure on prices, retailers remain optimistic that the general business situation will improve over the next six months. Employment grew at the fastest annual rate for two years and in June the number of retail jobs is expected to remain well above the levels of a year ago.
Strong annual growth was reported by newsagents and confectioners, and in the household goods, books, stationery and grocery sectors. Those reporting slower annual growth included, footwear and leather stores and those selling hardware, china and DIY goods.
