Retail sales back lower rates
The Confederation of British Industry says the slowdown in retail sales volumes in 2001 justifies its call for a 'meaningful' reduction in interest rates.
Latest figures from the CBI’s Distributive Trades Survey showed sales volumes growth at its slowest this year.
Forty-five percent of retailers surveyed said sales volumes were up, while 26% said they had fallen, leaving a positive balance of just 19% compared with a healthy balance of 54% recorded at the same time last year.
This represents the ‘least buoyant picture’ since December 2000 but is in line with the average balance since 1990.
The data showed sales growth continuing at a similar rate in November, breaking a succession of five-year peaks achieved over the summer.
DTS panel chairman and Boots director Alastair Eperon said with inflation prospects benign, ‘the CBI’s call for a meaningful rate cut is justified’.
Eperon said consumer spending had ‘moved out of fifth gear’ but did not mean it was heading for a standstill.
‘Anecdotal evidence suggests that sales may have been affected by the decline in tourist trade from the United States and by the unusually warm October, which has impacted on clothing sales in particular,’ he added.
The CBI said that despite signs of weaker consumer confidence, the underlying trend in retail sales remained fairly robust.
At the same time, the CBI has postponed surveying its members on whether or not Britain should adopt the new currency until euro notes and coins have been in circulation for some time.
According to the FT the news has been welcomed by all but the most hardened of pro-Euro ministers. The newspaper suggested the debate had been put off to avoid a ?potentially divisive debate within the organisation on the single currency.
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