| UK retail sales falter in June, economy seen contracting |
LONDON The economic impact of Britain’s sodden summer was laid bare on Thursday by dire news from major retailers showing that torrential rain had hurt already weak demand in an economy showing few signs of pulling out of recession.
Shops selling everything from home-improvement items to sportswear and goods for mothers and babies were hit.
Official retail data also indicated that celebrations to mark Queen Elizabeth’s Diamond Jubilee failed to provide the much hyped and hoped-for boost to spending, raising the question of whether the London Olympics will get the shop tills ringing.
Britain has not fully recovered from the 2008/2009 crisis that has left many Britons’ worse off and ripped a deep hole into public finances. The economy fell into its second recession in four years around the turn of the year.
Although inflation is easing and unemployment falling ongoing government austerity measures and turmoil in the euro zone are hurting Britons’ morale and spending power.
Prime Minister David Cameron will have done little to lift the mood when he said in a newspaper report that Britain’s programme of spending cuts could last until 2020.
“I can’t see any time soon when ... the pressure will be off,” he said in an interview with the Daily Telegraph.
Daniel Ward, a 26-year-old glazier, walking near Liverpool Street Station in central London, illustrated the British consumer’s state of mind.
“I’ve been spending less in the past few months because I haven’t got the money. I’ve got a mortgage and my girlfriend just got made redundant so I haven’t got any spare money,” he said.
The government remains under pressure to get growth going despite taking steps to get credit to businesses flowing and to boost infrastructure investment. The Bank of England may yet pump more money into the economy.
The wettest April to June period since records began exacerbated an already grim situation for retailers, hitting sales of goods ranging from barbecues to bicycles to football shirts.
The Office for National Statistics said retail sales rose by just 0.1 per cent on the month, well below economists’ forecasts for an 0.6 per cent increase.
Between April and June, retail sales were down 0.7 per cent, the sharpest quarterly drop in over two years.
Reuters
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