Retail sales drop

For the month of September retail sales fell to their lowest point in 1 ½ years. The Confederation of British Industry stated that 38% of retailers had reported a decline in year-on-year sales, with only 29% reporting a rise. With analysts having expected a balance of +15% this balance of -9% was a first since the war in Iraq broke out. Studies showed that consumer confidence has dropped to an all time low since 1 ½ years. Retailers also reportedly have less confidence in the future, with a majority expecting lower sales.

Ian McCafferty, the CBI's chief economic advisor, has pointed out that along with waning interest due to the weather, these new numbers showed a more fundamental slow-down was taking place. The Bank of England has focused on curbing consumer spending but McCafferty advises putting interest rates on hold. Rising interest rates would only be detrimental to the current retail climate.