By Marcus Leach
Data released today (Thursday) reveals that UK retail sales shrank more than anticipated in November as many shoppers carried out the bulk of their Christmas buying in October causing consumer demand to weaken.
Caxton FX’s Richard Driver admits the figure is worse than expected and does little to improve sentiment towards the UK economy. However, examining the last quarter as a whole, retail sales are actually one of the brighter spots in the UK economy.
“Negative growth is always disappointing and reduced demand for jewellery, computers, mobile phones and watches seems responsible but if we delve a little deeper there is room for some optimism," Mr Driver said.
“September and October’s figures have been revised up and the last three months as a whole posted 0.7% growth, the largest since August 2010.
“Many shoppers took advantage of early discounts in October, so a calmer November was to be expected. Nonetheless, I’m positive that a Christmas spending spree is likely to come and this would be very welcome.
“Although the past few months have actually been pretty robust on the retail side, the outlook for 2012 is pretty grim, as it is for the rest of the economy.
“UK consumer inflation is expected to give consumers a helping hand by falling sharply next year and it will have to if it is to offset stagnant wage growth and rising unemployment.
“Consumer confidence is declining sharply and all the talk of another UK recession is understandably reducing appetite on the High Street.”
Join us on