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High Street To Endure Decade Of Gloom, Says Ernst & Young Item Club

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http://www.guardian.co.uk/business/2011/may/16/high-street-faces-ten-years-of-gloom

Tough conditions for high street retailers will last for a decade, as household budgets are squeezed and people focus on paying down debt, according to economics thinktank the Ernst & Young Item Club.

With disposable incomes now falling, the thinktank predicts it will be 2013 before consumers themselves can start enjoying any economic recovery.

Data to be released this week is expected to show the economy reversing the gains of last year with higher inflation, rising unemployment and falling average incomes.

City analysts said inflation figures on Tuesday would show a return to the upward trend of the last year, with many fearing it will hit 5% in coming months.

The April figure for unemployment, also to be released this week, is due to show only a small rise on the month but will indicate the underlying trend is upward following deep cuts in local government jobs and other areas of the public sector. Meanwhile a survey of industrial production will point to a weakening of the manufacturing export boom, while average incomes continue to flatline.

Wow 2013 that's optimistic, that's when we can enjoy the economic benefits for printy printy? Can't wait.

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http://www.guardian....-years-of-gloom

Wow 2013 that's optimistic, that's when we can enjoy the economic benefits for printy printy? Can't wait.

The BBC's take on it:

http://www.bbc.co.uk/news/business-13408506

Consumer spending is expected to rise by only 2% a year in the 10 years up to 2020, according to Ernst & Young's Item Club.

Spending is being weighed down by debt repayments, restricted lending and high inflation, with the prospect of interest rate rises yet to come.

....

"The squeeze on household budgets is only going to intensify this year, as the gap between high inflation and subdued wage growth continues to widen and we experience a second consecutive year of declining disposable incomes," said Andrew Goodwin, chief economic adviser to the Item Club.

The research group forecasts that disposable income will fall again this year, by 0.1%.

Technology and leisure retailers are expected to be best positioned for any rebound in spending, while the outlook for hotels and restaurants is bleak.

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I think they are being a bit pessimistic, it depends which high streets, Bond Street should do fine

http://www.bbc.co.uk...siness-13408506

The effect is expected to be harshest outside London, the Item Club said.

And even though spending in London is expected to pick up by a relatively robust 1.5% this year, total spending in the capital - as across the whole country - will still not fully recover to pre-recession levels until 2013, the Item Club predicts.

Bond street is indeed predicted to do fine...

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Meanwhile another coffee shop just opened on our high street, but at the same time real shops continue to close.

Maybe the end result will be everyone sitting around sipping Lattes all day long watching tumble-weed blow down the high street?

Not to worry, all we need is more funny money to get things going again. Maybe the BoE can set the base rate to -15% so being in debt starts to pay interest?

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http://www.bbc.co.uk...siness-13408506

Bond street is indeed predicted to do fine...

so once again a positive economic article turnt into Doom & Gloom via an eye catching media headline. If Bond Street does OK the trickle down effect will reverborate out much like a pebble dropped in water.

Edited by georgia o'keeffe

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Not sure why this is suprise.

2002-2007/8ish is best sumarised as a period where people spent about 25 years disposal income on 'stuff''.

For some, they spent a lifetime's disposal income.

Unfortunately for the UK, rather than spending he money on productive capacity it all went on consumption and housing - Anyone want to buy a BMW X3 + hot tup + BTL in Scunthorpe?

We now enter a period of about 15 years where we pay the money + interest back.

PS. I can;t work out the coffee house economics. I know they charge comedy amounts for a cup but still!!!! My local town has about 6!

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New Costa coffee just opened here too

Yup we just got one in Huddersfield too. To add to the Coffee Nero. The other coffee shops in town are non chain, or "Merrie England.'s" All we need now is a Starbucks and recovereh will be complete!

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New Costa coffee just opened here too

Yeah it was a Costa that's just opened up here, guess they are expanding! We now have the trio of Costa, Nero and Starbucks, not to mention the umpteen other non-chain ones. All on a high street that I can walk from one end to the other in 3 minutes.

Plenty of loan sharks (banks) in the high street too...

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Thank goodness house asking prices are rising.

Maybe theres an inverse relationship here. Falling real wages leads to rising asking prices in some weird delusional offsetting.

Coffee shops abound here too.

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People need the caffeine in order to be able to put in the overtime to pay for all the crap they bought on tick.

Perhaps they live in them, getting 40 winks in the comfy chairs, then spending the nights wandering the streets? A sort of middle class version of tramps in the library?

I can understand why coffee shops can make good money in a boom - put a few pennies worth of milk and coffee in a cup and sell it for £3+ - but I can't really see how people can afford to go there regularly.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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