Spring brings glimmer of hope for rebound in consumer spending

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The Independent Online
A surge in activity in shopping centres, the housing market and the City of London will boost hopes of a spring revival for the economy, according to a slew of upbeat reports today.

A surge in activity in shopping centres, the housing market and the City of London will boost hopes of a spring revival for the economy, according to a slew of upbeat reports today.

The return of summer weather conditions lured shoppers to the high street and house-hunters back into estate agents' offices, surveys showed. Meanwhile, the number of unfilled vacancies at the heart of Britain's financial services industry is more than double what it was a year ago.

The number of shoppers out on the streets and malls of Britain on Good Friday was 10 per cent up on the same bank holiday a year ago, the retail analysts FootFall said. It left visitor numbers for the five days preceding the Easter weekend up by 1.5 per cent on last Easter, which fell two weeks later in 2004 than this year.

DIY stores, which traditionally do well at Easter, probably benefited from the warmer weather. Sheelah Turner, an analyst at FootFall, said the higher temperatures had not been enough to lure shoppers away from the indoor shopping centres. "Shoppers again left their shopping to the last minute, helped by the numerous spring sales in the latter part of the week," she said.

The figures may diffuse some of the gloom that has fallen over the high street since it emerged that Christmas sales had been the weakest for decades. Official figures showed that sales volumes, excludingfood stores, between December and February had fallen 0.6 per cent, the biggest drop since 1977.

The sector has been hit by a strong of profits warnings. Last week Next, Kesa Electricals, Woolworths and Topps Tiles became the latest to express concern.

SPSL, another retail traffic monitor, forecast total shopper numbers over Easter would be 3 per cent down. "Even the early timing of Easter is conspiring against shopping," Tim Denison, its director of knowledge, said.

On a brighter note, Hometrack, the property website, said the number of transactions rose by 17 per cent this month, following February's 36 per cent jump. It said buyers continued to return to the market, enabling sellers to hold out for a higher selling price. The average discount on the asking prices fell slightly, to 6.6 per cent in March.

John Wriglesworth, a housing economist at Hometrack, said: "An increase in the number of buyers, helping to boost the number of sales agreed, points to a much stronger market in the coming months.

"Buyers are no longer getting the discounts off the asking prices they were earlier in the year, again suggesting the market is improving."

The price of the average house fell 0.1 per cent in March, the ninth successive drop but the smallest for six months. Thirty-five counties or regions suffered a fall, while 22 witnessed a rise. Mr Wriglesworth said he had raised his forecast for annual house price inflation to 3 per cent from zero. "House price deflation over the past nine months looks set to end," he said.

Meanwhile, Morgan McKinley, a City recruitment consultancy, said the number of unfilled vacancies in the Square Mile had risen by 23 per cent between January and February.

It leaves the number of open posts at 11,277, more than twice the vacancy toll of 5,009 in the same month a year ago. Meanwhile, the number of candidates looking for a new job was up 40 per cent month-on-month.

Robert Thesiger, the firm's managing director, said: "Confidence in the City jobs market continues. The desire to hire the right talent is definitely there."

Although today's data are relatively marginal to the Bank of England's monthly decisions on interest rates, they support the view of the majority of City economists that the next move in rates will be upwards.

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