UK Retail Slows As Service Recovery Remains Uneven
Retail sales in the U.K. slowed dramatically in the second month of the year, raising a fresh round of questions about the strength of the country’s economic recovery, according to The Wall Street Journal.
Retail sales in the U.K. slowed dramatically in the second month of the year, raising a fresh round of questions about the strength of the country’s economic recovery, according to The Wall Street Journal. On Thursday, the Confederation of British Industry found that retail sales in the U.K. fell to a balance of six in February from 37 previously, suggesting that a large minority of retailers saw sales drop off from the level recorded one year earlier. The drop brought the index to the lowest level since June of last year, and far outpaced economists’ forecast for a nine-point decrease.
The CBI’s report also showed inflationary pressure that will likely increase pressure on policymakers to raise interest rates to contain price growth, with the selling-prices balance spiking to 75 in February from 45 previously. The latest reading is the highest since May 1991 and the survey found expectations for continued upwards price pressure. According to Financial Times, a separate report from the CBI found that in February the balance of increasing demand for business and professional services was 4 and 8, respectively, while consumer services saw a balance of 15 reporting contraction. The divergence indicates to the CBI’s chief economic adviser Ian McCafferty, “Consumer spending is contrained, held back by rising prices and squeezed real incomes.”