UK Retail Slows To Open 2011, Housing Market Weakens

The first economic for 2011 are setting a bleak scene for the U.K. economy even before government spending have their full effect, with retail sales and home prices slumping, according to The Wall Street Journal. On Thursday, the Confederation of British Industry reported that the sales-volume balance dropped from positive 56 in December to positive 37 in January, revealing that a far smaller portion of retailers are reporting stronger sales compared to one year earlier. With weak consumer confidence as public spending cuts loom, the balance of sales was expected to decline further to positive 25 in February.

Meanwhile, Hometrack reported that the average cost of a home in the U.K. dropped 0.5% in January from the previous month to reach £153,600, which is 2.2% less than the level recorded in January 2010, adds The Daily Telegraph. The data showed that the seventh consecutive drop in home prices was the result of decreasing of buyers and sellers on the market, with 9.5% fewer people registering with real estate agents and 5.4% fewer homes available for sale than the previous month. Hometrack director Richard Donnell said that demand would have to lead an improvement for the U.K. housing market, but said that the latest data and weak outlook for the economy as a whole mean “There are no signs of a New Year bounce for the housing market.”

Click here to read the story on retail sales from The Wall Street Journal.

Click here for coverage of home prices from The Daily Telegraph.