More Evidence Of Housing Slowdown

[Realistbear]

http://news.bbc.co.uk/1/hi/business/4487370.stm

"The firm's retail arm is struggling against a slowdown in both consumer spending and the housing market. Annual sales will be down 10%, it said. "

Looks like the VI spin is running contrary to the marketplace realities?

[karhu]

http://news.bbc.co.uk/1/hi/business/4487370.stm

"The firm's retail arm is struggling against a slowdown in both consumer spending and the housing market. Annual sales will be down 10%, it said. "

Looks like the VI spin is running contrary to the marketplace realities?

Just about everyone is having a sale. WH Smith 10% off everything. M&S price discounts and a free bottle of cava. More on the radio this morning..... With this aggressive approach I guess they'll survive Christmas, but the real crunch comes in the New Year. I can see a LOT of job losses in the retail sector.

[OnlyMe]

The consumer sector will be knackered if it thinks it can rely on the renter sector to fuel it or invesment buyers purchasing property and doing it up.

Every time the BRC come out with a rate cut call it only steels me to spend less or indeed save as much as possible by buying elsewhere - usually abroad.

[Guest Time 2 raise Interest Rates]

It looks like the VIs are fighting a losing battle. B&Q profits

slump 50%. Fasten your seatbelts. It's all going downhill fast.

[karhu]

Every time the BRC come out with a rate cut call it only steels me to spend less or indeed save as much as possible by buying elsewhere - usually abroad.

Yea, I can't understand why they keep going on about a rate cut. Maybe it's time to downsize and increase efficiency to suit the market. The previous levels of retail sales were unsustainable (in terms of £). Why can't they just accept that the market has changed and adapt, and not expect the BOE to step in and bail them out. Everytime I see a retailer lay off staff I see their stock increase in value; obviously the way forward then.

[stillill]

Just about everyone is having a sale. WH Smith 10% off everything. M&S price discounts and a free bottle of cava. More on the radio this morning..... With this aggressive approach I guess they'll survive Christmas, but the real crunch comes in the New Year. I can see a LOT of job losses in the retail sector.

It's great, sort of.

20% off at Borders (with vouchers)

20% off at Selfriges (with vouchers)...

If you have to buy gifts, there's some bargains.

moneysavingexpert.com has them in the bargain forum...

[HenryWeston]

cant remember when ive seen so many sales on! dont we normally have loads of sales in january not december ??? not that im buying anything, some christmas cards and thats it

[Flash]

The whole retail sector in the UK is now showing classic signs of having over-extended itself.

I expect a huge shake-up in retail next year, with many store closures and job losses. This will have a massive effect on sentiment, due to the knock-on effects in other areas that service this sector. The UK is now more dependent on retail than ever in its history.

I notice that several out-of-town retail parks are still being built. The projected unit rents for many of these were far too optimistic. If the real figure had been pencilled-in at the planning stage, they may not have been viable. Next year will be very interesting.

Anecdotal: I was talking to a friend from Kent the other day who has just bought a much bigger house than he needed for his wife and two kids.

We were talking about interest rates and he was me asking where I thought things were going. It made me suspect that he has over extended himself a bit.

I told him that the BOE probably has no scope to lower rates further and that the next move could in fact be up. He looked concerned, but then lightened up and said that if things "got a bit tight" he could just send his wife out to work at the local shopping centre.

That may be difficult. I suspect that there may be more people chasing fewer jobs in retail next year.

[The Masked Tulip]

The B&Q fall is the most interesting as I clearly remember this happening in the last crash and within 18 months or so HPs had tanked. I think it was WH Smith's DIY chain - Do It All? - that basically never recovered and for most of the '90s their shed here in Swansea remained empty with a big 'To Let' sign outside.

The local Wickes also went, IMPO, noticeably downhill and it is only this year that Wickes have opened a nice new shiny shed - just in time for the crash perhaps? At the same time, all around the Swansea area, B&Q have been opening enormous sheds - one in Swansea, one in Llanelli - that takes ages to walk around.

[737]

I told him that the BOE probably has no scope to lower rates further and that the next move could in fact be up.

You're just guessing - the truth is that inflation is benign and rates are just as likely to go down in the short to medium term.

"In its latest quarterly projections, the BoE's rate-setting Monetary Policy Committee said it expects the CPI measure of inflation to stay slightly above 2.0 pct in the near term before dipping under that level further out as the effects of higher oil prices drop out from the annual comparison.

Inflation is then seen rising back to the 2.0 pct target level two years out, as overall activity revives.

Overall, the outlook for inflation is 'slightly weaker' than in August, the central bank said. "

[Flash]

You're just guessing - the truth is that inflation is benign and rates are just as likely to go down in the short to medium term.

"In its latest quarterly projections, the BoE's rate-setting Monetary Policy Committee said it expects the CPI measure of inflation to stay slightly above 2.0 pct in the near term before dipping under that level further out as the effects of higher oil prices drop out from the annual comparison.

Inflation is then seen rising back to the 2.0 pct target level two years out, as overall activity revives.

Overall, the outlook for inflation is 'slightly weaker' than in August, the central bank said. "

To clarify, I feel that the BOE has little scope to relax fiscal policy when the US and EU are tightening. As you say, the MPC continues to predict benign inflation. This is interesting, since in order for this to come true, interest rates rises may well be required.

[737]

To clarify, I feel that the BOE has little scope to relax fiscal policy when the US and EU are tightening. As you say, the MPC continues to predict benign inflation. This is interesting, since in order for this to come true, interest rates rises may well be required.

An MPC rate cut in February is now being forecast by the money markets. Good news for home owners, not too good for those out of the market I'm afraid!!

[Perfectionist]

Ah, the good old B&Q Index !!

It's interesting to hear about the big chain stores stuggling but I can't help feeling all that's happening is trade is going to the smaller independent retailers and online retailers who offer better prices ??

People are still spending ..... just at different places .....

[Chesterfield]

An MPC rate cut in February is now being forecast by the money markets. Good news for home owners, not too good for those out of the market I'm afraid!!

Weren't the same claims about money markets predictions of a cut made in November (evidenced in September / October threads). The truth is speculation of rate changes 2 /3 months hence are impossible to call. I personally believe there will be a rate increase in line with a common global direction but IMHO only

[Realistbear]

A rate cut in the face of rising inflation, higher rates in the EU and US seems unlikely. The ONLY thing keeping the pound from tanking right now is the belief that there will be no HPC. Given the CBI's report that retail sales are the worst for 22 years my guess is that unemployment in large numbers is about to follow. There may be a rate cut but it will be in the midst of a sliding housing market and much longer sausage queues.

Looks like the collapse in the retail marketplace may prove to be the HPC trigger as it holds the key to the direction employment numbers will take. No sales, no orders, no jobs.

[Flash]

An MPC rate cut in February is now being forecast by the money markets. Good news for home owners, not too good for those out of the market I'm afraid!!

February? Why do you say that? I'm not saying that you are wrong, just interested to know more.

Forex markets appear unsure and Sterling appears to be turning up versus the Dollar.

http://www.dailyfx.com/index.php?option=co...=5182&Itemid=39

Against the U.S. currency, the British pound made a concerted effort to climb higher earlier on in light of confirmed strength by the world’s largest economy. According to the Commerce Department, U.S. gross domestic product rose better than expected in addition to higher consumer spending figures and manufacturing activity. All dollar bullish, optimism derived from the data quickly fell to the wayside as comments by the newest Monetary Policy Committee member David Walton stated to the Times that inflationary pressures could indeed remain in the region as growth potentially recovers.

Edited December 1, 2005 by Flash