Modest rise in retail sales means a close call on rates
Thursday 06 May 1999
The Confederation of British Industry reported a slight rise, for the second successive month, in the volume of sales on the high street. The three-month average for sales volumes - a better indicator of the underlying trend - reached its highest level since July.
But the CBI, as with other business organisations and unions this week, urged the monetary committee to reduce the cost of borrowing by another quarter point.
Alastair Eperon, chairman of the CBI's distributive trades survey panel, said the slight increases in sales volumes suggested that consumers were starting to spend money again, but he added: "The momentum needs to be maintained."
City opinion remains divided, with some economists expecting a rate reduction today and others looking ahead to the likely need for rate increases later in the year.
Marian Bell, an economist at Royal Bank of Scotland, said: "I think there is a danger the monetary committee will cut again before they stop, and will need to reverse it later."
The lags in monetary policy meant that the lower interest rates since autumn 1998 had not yet had their full impact on the economy, which was already recovering, said Ms Bell.
But the renewed strength of the pound, whose index climbed by 0.3 points to 105.0 yesterday, favours a rate cut. Speaking on the exchange rate, John Townend, Bank of England director for European matters, yesterday said: "There is no question that it does affect the UK's competitiveness."
Richard Iley at ABN Amro said that yesterday's CBI survey results, although not a good guide to official retail sales figures, showed that consumer demand was still patchy.
The CBI said the number of retailers reporting higher sales exceeded those reporting falls by 15 per cent, similar to March's 14 per cent balance. The three-month average rose to 10 per cent from 2 per cent.
Retailers of footwear and specialist foods, as well as off-licences, reported the biggest increases in sales last month, but the sales of new cars dropped sharply in April after the surge in March caused by the start of the new T-registration period.
- 1 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 2 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 4 John Travolta addresses former pilot's gay romance allegations publicly for the first time
Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
Scottish independence: Police will be on high alert on Friday whatever the result
John Travolta addresses former pilot's gay romance allegations publicly for the first time
QS university world rankings: Imperial College London leapfrogs Oxford to join Cambridge as best British university
Scottish independence exclusive: Millions of banknotes sent to Scotland in case Yes vote sparks run on ATMs
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
Portuguese academic says British are 'filthy, violent and drunk'
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
iJobs Money & Business
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...