Triple blow for battered UK economy
Retail sales and housing market suffer as struggling consumers rein in spending
Britain’s battered economy will be dealt a triple whammy today, with fresh evidence that the housing market and consumer spending are continuing to contract and that manufacturers are being hammered by soaring costs.
This summer has been the worst on the high street since 2005, according to the British Retail Consortium, with like-for-like sales falling 0.9 per cent last month compared to the previous July.
Consumers hit by rising food and energy bills reined in spending and soggy summer weather hit high street sales forcing retailers to heavily slash their prices in a bid to encourage shoppers through the door.
Meanwhile, the Royal Institution of Chartered Surveyors’s (Rics) monthly housing market survey – increasingly used by the Bank of England to help determine interest rates – shows the housing market continued to contract in July as banks tightened their lending criteria. The average number of transactions per surveyor fell to just over 14 – the lowest figure since records began in 1978. The majority, 83.9 per cent, of surveyors also reported a fall in house prices.
“The lack of mortgage finance has brought the housing market to a virtual standstill with first-time buyers rapidly becoming an endangered species,” a Rics spokesman said. Separately, record numbers of small to medium-sized manufacturers experienced cost increases in the three months to July, according to a CBI survey out today, with many forced to pass the rise onto consumers.