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Surprise Rise In Uk Retail Sales


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HOLA441

http://news.bbc.co.uk/1/hi/business/7306333.stm

With people unable to afford or able to get Mortgages will we see a massive spending boom on the hi street by people renting or living at home?

"UK retail sales unexpectedly rose strongly in February, driven by higher food sales at the supermarkets, official figures have shown.

Sales grew 1% last month from January and by 5.5% from February 2007, said the Office for National Statistics.

The figures have surprised analysts, who had expected sales in February to decline 0.2% from January.

The upbeat data may persuade the Bank of England to delay further reductions in interest rates.

"

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http://news.bbc.co.uk/1/hi/business/7306333.stm

With people unable to afford or able to get Mortgages will we see a massive spending boom on the hi street by people renting or living at home?

"UK retail sales unexpectedly rose strongly in February, driven by higher food sales at the supermarkets, official figures have shown.

Sales grew 1% last month from January and by 5.5% from February 2007, said the Office for National Statistics.

The figures have surprised analysts, who had expected sales in February to decline 0.2% from January.

The upbeat data may persuade the Bank of England to delay further reductions in interest rates.

"

The higher food sales they talk about, is that for items or for prices? Of course more money was spent in supermarkets, thats because food has rocketed up in price

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The higher food sales they talk about, is that for items or for prices? Of course more money was spent in supermarkets, thats because food has rocketed up in price

Pretty pathetic that the article doesn't actually state it - but that's BBC reporting for you. It's actually sales VOLUME: http://www.statistics.gov.uk/cci/nugget.asp?id=256

Weird. Could be due to people buying in bulk to save dosh?

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so seasonally adjusted all retailers volume up 1%, of which food 1.6% and everything else 0.5%. Household goods -4.2% MoM.

By value, total +4.1%, (given this is RPI or less, this is flat or down in real terms), of which food +6.2% all else +1.6% (which is a real decline on CPI, and a substantial real decline on RPI).

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I would like to hear some contrary arguments but I don’t find it ‘hard to see’ consumer spending holding. The implication is that most of the high street sales are funded by debt (and that *may* be?) or that higher mortgage repayments are reigning in spending. My own view is that anybody that has taken out a mortgage in the past 5+ years was probably not a significant spender anyway, they could not aford to be. They would have already sacrificed their spending power for their housing costs long ago. This leaves those without unmanageable mortgages or other liabilities as the main driver of consumer spending. Until this group start to lose their jobs, have salary erosions over time etc., why would spending reduce amongst this group?

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