By Maximilian Clarke
Retail sales in the UK fell by 0.8% in February as retailers across the country continue to feel the pinch.
A two-year squeeze on UK households’ budgets as a result of a public sector pay freeze and widespread employment uncertainty, have eroded consumer confidence across the UK, fuelling a host of high-profile retail closures.
Over the past 12 months, retail growth has all but stagnated, with a 3.2% annual rise in retail sales values outstripped by RPI inflation.
The 2012 Budget offered no immediate respite for retailers, dashing hopes outlined by centre-left policy think tank IPPR that boosting consumer confidence through lessened austerity was the surest route to lasting economic growth.
“We were always going to have a fall following last month’s bumper 1.2% rise, but a dip of 0.8% has caused people to sit and wonder whether the economic revival at the beginning of 2012 is already coming to an end,” commented Jeremy Cook, Chief Economist at World First foreign exchange. “We think not, but this doesn’t change the fact that the consumer is facing a barrage of higher taxes, high inflation and increased fears over unemployment. “
“It is our belief that a lot of the rise last month was as a result of price discounting and this month’s dip was as a result of the festive price cutting ending and shoppers counting the pennies a little more carefully.
Many had hoped the 2012 Budget would see the chancellor implement a host of employment and growth boosting measures. This was not the case:
“The fact that it follows a budget that was short on growth targeting measures will not go amiss however.”
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