February shoppers avoid high street
UK high street sales rose just 1.5 per cent in February - adding further gloom to a despondent economy.
British Retail Consortium (BRC) data reveal like-for-like sales for the last three months were up a touch by 1.6 per cent as discounting was necessary to tempt shoppers who are increasingly reluctant to splash out and are still very price conscious.
The slow February figures came after a January fillip as shoppers scoured the stores for post-Christmas bargains.
Stephen Robertson, BRC director general, said: "After a blip at the start of the year as clearance sales temporarily got customers spending, belt tightening began in earnest in February when the Christmas and New Year credit card bills came home to roost.
"Both retailers and consumers are being squeezed by sharp increases in utility bills and fuel costs. So the Chancellor's theme on Wednesday should be a Budget to revive the economy, rather than one piling on new taxes and regulations."
Howard Archer, chief UK economist at analysts Global Insight, explained the BRC survey reinforces the belief that "consumer spending is being increasingly pressurized by serious headwinds stemming from muted real disposable income growth, tighter lending practices, a substantially softer housing market, lower equity prices and increased debt levels."
He added predicted interest rate cuts would help to keep the consumer on the high street, but these would be cancelled out by rising unemployment and a slowing economy.
Mr Archer added the future of interest rates very much depended on the health of consumer spending.
"The future path of consumer spending will play a key role in determining just how long and deep the UK's economic slowdown will be," he said.
"Not only does consumer spending account for some two-thirds of total GDP, but consumers are facing their most difficult times for many years.
"Consequently, future developments in spending will strongly influence the Bank of England in its future interest rate decisions. However, the Bank will be particularly keen to see that moderating consumer spending is diluting the pricing power of retailers and other companies."
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