Retail sales improvement 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.
Apple has been hit by complaints about the 1.1GB download
Much-loved cartoon character returns - without Sir David Jason
Liam Neeson's Downton dreams
Matt Smith is set to join cast of the Jane Austen classic - with a twist
Actress to appear in second series of the hugely popular crime drama
Olympic diver has made his modelling debut for Adidas
- 2 Scottish independence: Learn from Quebec's mistakes and beware of promises. Vote Yes.
- 3 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 5 Have you heard about the film Singapore has banned its people from watching? Well, you have now
Thailand beach murders: Thai PM suggests 'attractive' female tourists cannot expect to be safe wearing bikinis
Scottish independence: Final opinion polls show undecided voters could swing result either way
Scottish independence: Almost half of No voters have felt 'personally threatened' by the Yes campaign
Isis release 'Flames of War' video warning Obama of attacks troops could face in Iraq
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
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
Portuguese academic says British are 'filthy, violent and drunk'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
iJobs Money & Business
£70-90,000: Saxton Leigh: Our client a London Market Insurer are seeking a Pro...
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...