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Tough Month For Retailers Makes Rate Rise Unlikely

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Guest wrongmove

Tough month for retailers makes rate rise unlikely

" A double whammy of higher interest rates and cold, wet weather made May a wash-out for retailers, according to a survey out today.

In findings that will cement expectations that the Bank of England will freeze borrowing costs this week, the British Retail Consortium said the high street suffered its worst month since last November as stretched consumers shunned new spring fashions. Like-for-like sales were only 1.8 per cent higher in May than a year earlier, down from 2.4 per cent in April and less than half March's 3.9 per cent.

The three-month trend rate of growth, which irons out monthly fluctuations, fell back to 2.8 per cent from 3.3 per cent in April.

The BRC said clothing and footwear sales suffered the biggest decline as the weather deteriorated after a warm April. The DIY and gardening sectors were also hit by the cold and rain, and big-ticket purchases continued to be disappointing. Smaller homewares, toiletries and cosmetics held up well, but food sales were less good than earlier in the year.

Kevin Hawkins, the BRC's director general, said: "Although the weather was bound to depress sales growth, many of our members believe that the cumulative effects of the recent rate increases are beginning to show up in these figures. The Bank should think twice before putting up rates again in the near future."

The Bank's Monetary Policy Committee has raised rates four times since last August in an attempt to drag inflation, running at 2.8 per cent, back to its 2 per cent target. The vast majority of City pundits - 55 out of 58 analysts polled by Reuters yesterday - predict it will peg rates at the prevailing 5.5 per cent when its two-day meeting wraps up on Thursday. However, at least one more quarter-point increase is expected over the summer amid signs that firms are regaining pricing power........"

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Dr Gavin Cameron, a reader in macroeconomics at Oxford University, said supermarkets and other grocers would benefit from strong price rises in food, but prospects for non-food retailers were bleak. "A slowdown in the housing market is likely to have consequences for major household appliance, furniture and furnishing sales, which comprise most of the few non-food retail sectors to show any signs of price rises this year," he said. "In this light, the Bank should be cautious about raising rates too vigorously."

IMO pretty accurate.

I think Gap's due to announce UK redundancies today.

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What has May's wet weather got to do with the setting of interest rates? Don't they take 2 years to have an effect?

Crikey, it's so easy for misinformation to rule as the standard of journalism is awful. And the Indy's about as good as it gets normally.

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What has May's wet weather got to do with the setting of interest rates? Don't they take 2 years to have an effect?

Crikey, it's so easy for misinformation to rule as the standard of journalism is awful. And the Indy's about as good as it gets normally.

Er it never fails to amaze me how the weather STILL casues issues in a soggy nation such as ours

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I think that they will hold rates this month and wait the inflation figures on June 10th and then bring in another 1/4 point rise in July.

Keep em coming - at least for the sake of my ISA. :P

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I think that they will hold rates this month and wait the inflation figures on June 10th and then bring in another 1/4 point rise in July.

Keep em coming - at least for the sake of my ISA. :P

They will get a view of the inflation figures before meeting this month!!

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Tough month for retailers makes rate rise unlikely

" A double whammy of higher interest rates and cold, wet weather made May a wash-out for retailers, according to a survey out today.

In findings that will cement expectations that the Bank of England will freeze borrowing costs this week, the British Retail Consortium said the high street suffered its worst month since last November as stretched consumers shunned new spring fashions. Like-for-like sales were only 1.8 per cent higher in May than a year earlier, down from 2.4 per cent in April and less than half March's 3.9 per cent.

The three-month trend rate of growth, which irons out monthly fluctuations, fell back to 2.8 per cent from 3.3 per cent in April.

The BRC said clothing and footwear sales suffered the biggest decline as the weather deteriorated after a warm April. The DIY and gardening sectors were also hit by the cold and rain, and big-ticket purchases continued to be disappointing. Smaller homewares, toiletries and cosmetics held up well, but food sales were less good than earlier in the year.

Kevin Hawkins, the BRC's director general, said: "Although the weather was bound to depress sales growth, many of our members believe that the cumulative effects of the recent rate increases are beginning to show up in these figures. The Bank should think twice before putting up rates again in the near future."

The Bank's Monetary Policy Committee has raised rates four times since last August in an attempt to drag inflation, running at 2.8 per cent, back to its 2 per cent target. The vast majority of City pundits - 55 out of 58 analysts polled by Reuters yesterday - predict it will peg rates at the prevailing 5.5 per cent when its two-day meeting wraps up on Thursday. However, at least one more quarter-point increase is expected over the summer amid signs that firms are regaining pricing power........"

Subtitled: "Please don't put the IR's up again, please, pretty please" ;)

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Like-for-like sales were only 1.8 per cent higher in May than a year earlier

Greedy *****. Please don't put up IR's as we've not met our 5% YOY increase in sales.

:angry:

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Just out of interest, is there a lobby group for savers?

If there were then savers could also slip out strategically-timed press releases.

Edited by Starcrossed

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Greedy *****. Please don't put up IR's as we've not met our 5% YOY increase in sales.

:angry:

TOTAL sales were up 5%.

Too many crap shops all selling the came crap on the same crap highstreets that are mini replicas of themselves in every town in the country.

http://www.rttnews.com/forex/economicnews....2007&item=3

The three-month trend rate of growth for like-for-like sales eased to 2.8% from 3.3% registered in April. The trend rate of growth for total sales climbed at a slower pace of 5.0% from 5.5%

Edited by OnlyMe

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Guest Bart of Darkness
What has May's wet weather got to do with the setting of interest rates? Don't they take 2 years to have an effect?

Crikey, it's so easy for misinformation to rule as the standard of journalism is awful. And the Indy's about as good as it gets normally.

Is it "that time of the month" again already?

The MPC should "wait and see" about retail before deciding to hold! ;)

:lol:

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