Thursday, Jun 19, 2008
Life in the old dog yet or could it be inflation
BBC: Retail sales rise at record pace
The spell of warm weather in May helped to trigger a record jump in UK retail sales, official figures have show.
Overall sales rose by 3.5% during May, the strongest monthly growth in sales since the series began in January 1986.
Posted by holding out @ 10:20 AM (518 views) Add Comment
4 Comments
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1. Landedgentry said...
Good, the last bits of available credit or loan from grandma being p***ed up the wall, now raise rates by at least 1% please !!!
2. str 2007 said...
Can't quite believe someone hasn't worked their spreadsheet properly and included April figures aswell.
If this is correct the fact it is a record beggars believe, yes I can understand people buy different things in May ie salads and summer cloths, but surely these by their very nature are cheaper goods.
From the amount of people I've seen shopping I would expect sales to be down, not up to record levels.
Interest rate rises next month anyone ?
3. Fubar said...
On another thread (can't remember which) someone mentioned the feel good factor of comfort shopping when things are gloomy. Could this be a touch of that perhaps? Also the article doesn't go into how the increase is being paid for. I.E. are people racking up more debt on credit cards as an "Oh fvck it" type of fatalism takes over? In for a penny in for pound (or ten thousand) as it were.
4. stillthinking said...
The idea that somehow a consumer slowdown is good completely escapes me. If we need to shop less for the good of the economy, presumably the economy would also benefit if we stopped opening new companies with tempting products on sale....
If inflation is the ratio between the amount of money in an economy and goods within that economy, then if demand fell, supply would also fall, and if supply fell then there would be more money available than produced goods.
What the bank means, as the only explanation that makes sense to me, is that there is all this inflation cooked into the system that we are not aware of, and should any competition for resources arise due to high demand, then the new price level would reflect this currently hidden level of inflation.
Or another way, that reducing demand, and holding down wages doesn't actually do anything to lower inflation, just hides it. So our problem at the moment is that the curtain has fallen off -existing- inflation, and that the gov./boe are desperate to conceal again.