Retail sales in UK climb in October
By Robert Barr |
November 20, 2009, Friday
|
Print Edition
Print Edition
UNITED Kingdom retail sales rose in October but lending conditions remained tight, suggesting recovery from recession will be slow, official figures showed yesterday.
The 3 percent rise in retail sales was the best figure since August of last year and due largely to a 3.9 percent boost to food sales, according to the Office for National Statistics.
Nonfood stores also saw an increase, of 0.9 percent, with textiles, clothing and shoe stores booking a 4.2 percent gain and household goods up 2 percent.
However, separate figures showed the flow of credit in the British economy had not yet recovered from the credit crunch and threatened any rebound in growth.
The Bank of England said lending to British businesses shrank by 4.6 percent in September, driving the 12-month growth rate to a record low of minus 6 percent.
Major banks expect subdued demand for new lending through the fourth quarter, the BOE said.
"While some business contacts of the Bank's agents particularly from larger firms outside of the property sectors reported that credit availability had eased, many others continued to report concerns over access to finance," the central bank said.
"The major UK lenders reported that an increase in competitive pressures had led to some narrowing of spreads on lending to larger businesses."
Howard Archer, chief European economist at IHS Global Insight, said the tight credit conditions, and high unemployment, low earnings growth, rising debt and worries about the economy, will weigh against future growth in spending.
"Consumers will also be wary that further out they are very likely to face higher taxes as part of the major corrective action that will be needed to rein in the terrible government finances," Archer said.
In fact, data released yesterday showed government borrowing was 11.4 billion pounds (US$19.1 billion) in October, raising net debt to 829.7 billion pounds, equivalent to 59 percent of gross domestic product.
The 3 percent rise in retail sales was the best figure since August of last year and due largely to a 3.9 percent boost to food sales, according to the Office for National Statistics.
Nonfood stores also saw an increase, of 0.9 percent, with textiles, clothing and shoe stores booking a 4.2 percent gain and household goods up 2 percent.
However, separate figures showed the flow of credit in the British economy had not yet recovered from the credit crunch and threatened any rebound in growth.
The Bank of England said lending to British businesses shrank by 4.6 percent in September, driving the 12-month growth rate to a record low of minus 6 percent.
Major banks expect subdued demand for new lending through the fourth quarter, the BOE said.
"While some business contacts of the Bank's agents particularly from larger firms outside of the property sectors reported that credit availability had eased, many others continued to report concerns over access to finance," the central bank said.
"The major UK lenders reported that an increase in competitive pressures had led to some narrowing of spreads on lending to larger businesses."
Howard Archer, chief European economist at IHS Global Insight, said the tight credit conditions, and high unemployment, low earnings growth, rising debt and worries about the economy, will weigh against future growth in spending.
"Consumers will also be wary that further out they are very likely to face higher taxes as part of the major corrective action that will be needed to rein in the terrible government finances," Archer said.
In fact, data released yesterday showed government borrowing was 11.4 billion pounds (US$19.1 billion) in October, raising net debt to 829.7 billion pounds, equivalent to 59 percent of gross domestic product.
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