U.K. Retail Sales Fall at Fastest Pace in Almost Three Years
The gauge of annual sales growth dropped to minus 19 from minus 11 in October, the lowest since March 2009, the London- based business lobby said in a report today. Retailers had forecast an increase in November and a measure of expected demand for next month was at minus 6, which the CBI said points to a further decline.
U.K. consumer confidence fell to a record low in October as Europe’s debt crisis and the unemployment outlook worsened, Nationwide Building Society said on Nov. 17. Bank of England policy maker Martin Weale said last week there may be a “strong case” for policy makers to expand stimulus again. Governor Mervyn King is due to answer lawmakers’ questions on the outlook for the economy at a parliamentary committee today.
“Retailers remain hard pressed, even as we get closer to Christmas,” Ian McCafferty, chief economic adviser at the CBI, said in a statement. They “may be hoping that shoppers will loosen their purse strings in the run-up to Christmas, but consumers are likely to remain cautious about spending given the uncertain economic outlook.”
A measure of three-month sales volumes slipped 2 points in November to minus 15, the lowest since August 2009, the CBI said. An index of the volume of sales for the time of year fell 5 points to minus 39.
A gauge of orders placed with suppliers plunged to minus 25 in November from 1 the previous month, while an index of stock volumes in relation to expected demand decreased to 8 from 15.
The British Chambers of Commerce cut its growth forecasts today and said the risk of another recession “cannot be shrugged off.” The Organization for Economic Cooperation and Development said the economy “urgently” needs more support and forecast that the Bank of England will increase its bond- purchase target by 125 billion pounds ($194 billion) early next year.
The central bank raised the target by 75 billion pounds in October, and a number of policy makers said a further increase may be warranted in the future.
A separate quarterly index by the CBI showed the pace of selling-price inflation gained 1 point to 56 in November from August, while a measure of employment intentions fell 20 points to minus 27, the lowest in two years. A quarterly measure of retailers’ business situation rose to minus 8 from minus 11, which was the lowest reading since February 2009.
The CBI report is based on a survey of 80 retailers between Oct. 27 and Nov. 16.
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