Spending slowest for two years
CBI survey shows weakening growth
September 4 2002
Annual growth of UK retail sales is at its weakest for nearly two years, according to the CBI’s latest distributive trades survey.
Growth in sales was below expectations for the fourth successive month, with 35 per cent of respondents saying sales were up compared to a year ago while The three month moving average, fell to its lowest since December 2000.
Retailers’ expectations have been sharply scaled back, with 38 per cent expecting sales to rise in September but 28 per cent saying they will be down.
Ian McCafferty, CBI Chief Economist, said: “This survey confirms our view that the growth of consumer spending is slowing sharply from the rapid rates seen through most of 2001 and early 2002. Net incomes have been growing more slowly and consumer confidence may have been knocked by uncertainty in the financial markets and the wider economy. Retailers now believe an upturn will not come quickly and have reduced their expectations.
“The Bank of England is right to promote long-term stability but should stand ready to cut interest rates if this stream of gloomy economic news continues.”
Retailers of durable household goods, furniture and carpets showed strong growth, while the sharpest falls in sales were reported by sellers of hardware, china, DIY and specialist food.
