Retail sales dip adds to rate cut pressure
Friday 19 March 1999
The volume of sales on the high street dipped by 0.3 per cent last month. There was a 1.3 per cent rise in the year to February, but the Office for National Statistics said the underlying rate of sales growth had slowed.
"There is enough here to convince the Bank of England the economy needs a bit more of a lift," said Ciarn Barr, an economist at Deutsche Bank.
Willem Buiter, the one member of the Monetary Policy Committee to vote for an interest rate cut earlier this month, said yesterday he favoured moving quickly to a level at which rates would not have to be cut again. However, he added that confidence indicators had improved since January. "There has been a quick turnaround," he said.
Most analysts see the level of borrowing costs falling from the current 5.5 per cent to a trough of 5 per cent or even 4.5 per cent.
Yesterday's statistics showed declines in all categories of sales volumes in February. In year-on-year terms, sales of household goods remain the strongest, up 7 per cent thanks to the steady housing market. Department stores are faring poorly, with sales down 2.2 per cent in the year to February. However, the retail sales figures have been erratic. The timing of sales around Christmas and New Year makes them difficult to interpret.
Separately, the Bank of England reported a slowdown in the growth of broad money, M4. Its growth rate declined to 7.5 per cent last month.
Both the British Bankers' Association and Building Societies Association reported weak lending in February. Underlying growth in home loans remained buoyant, but Abbey National's securitisation of pounds 1bn of mortgages depressed the figure.
Adrian Coles, BSA director general, said a big increase in the number of loans approved signalled the possibility of a spring pick-up in the housing market. Approvals climbed to 1,950 in February, the highest level since September. Other new lending to individuals slowed to pounds 478m in February, well below the recent monthly average.
- 1 Autistic adults could take pure MDMA to 'reduce social anxiety'
- 2 Stolen Instagram photo sells for $90,000
- 3 Before you complain about your GP, this is what you need to know about actually doing the job
- 4 Charlie Charlie Challenge explained: not a Mexican demon being summoned — it's gravity
- 5 Paracetamol Challenge: Mother of girl killed by overdose pleads with teenagers not to take part
Iran launches anti-Isis cartoon competition 'to expose true nature of Islamic State'
'Don't blame all men for rape' campaign backfires spectacularly
Fifa corruption arrests: How Chuck Blazer rinsed money from the beautiful game
Fifa corruption live: Uefa to consider pulling teams from Fifa tournaments if Blatter stays
Ukip MP Douglas Carswell says he felt his safety was 'seriously at risk' after he was surrounded by anti-austerity protesters
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
The day that Britain resigned as a global power
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Australian man punched in the face for defending Muslim women from abuse on train
A nation of inequality: How the UK is failing to feed its most vulnerable people
EU referendum: David Cameron to deny EU migrants and under-18s the chance to vote
iJobs Money & Business
£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...
£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...