E was more gloom for the UK’s economy yesterday after retail sales for January look likely to have stalled after snow and the VAT hike kept shoppers away from the high street.
The Confederation of British Industry’s (CBI) monthly distributive trades survey showed that the balance of retailers reporting an increase in sales fell to -8 per cent in January from 13 per cent in
December. Retailers were also less confident that sales would rise in February.
Andy Clarke, chairman of the CBI Distributive Trades Panel, and chief operating officer of Asda, said: “Many retailers were much more aggressive in their discounting last January, which could partly explain why sales have slipped a bit this year.”
Weak consumer spending would de-rail the UK’s economic recovery said IHS Global Insight economist Howard Archer: “The January CBI survey fuels suspicion that the upside for consumer spending – and hence overall economic growth – will be limited in 2010.”
Even without further snow the UK’s retailers are likely to have a tough year as householders remain under considerable pressure. Fears over employment and tax increases after the general election are expected to weigh on consumption.
Economists were not surprised by a fall in sales at the start of this year after weak consumer confidence.