Fears that the stronger-than-expected third quarter GDP for the UK was masking underlying weakness in the British economy are starting to appear justified.
In the past few hours two negative batches of UK data have hinted at fragility and deterioration in certain economic sectors.
Although housing reports have been notoriously contradictory lately, according to Halifax UK house prices dropped for a fourth consecutive month in October.
Values fell to an average of 158,426 pounds (a drop of 0.7 per cent) as the housing market continues to struggle in the face of economic uncertainty and consumer confidence remains at a low. Prices are now down 2.8 per cent from the same period last year.
Martin Ellis – an economist with Halifax – stated: ‘Signs of a modest deterioration in the trend in house prices continued in October. The weak economic background has been a key factor dampening housing demand this year. Recent encouraging developments relating to the level of overall economic activity and conditions in the labour market, however, may help to support demand and underpin house prices around current levels over the coming months.’
Meanwhile, a separate report released by the British Retail Consortium has dashed hopes that consumers will lead the charge against the economic struggles.
The report showed that in October retail sales slowed steeply enough to make the month one of the worst for the sector across 2012.
Even though total retail sales were up 1.1 per cent on the year this figure was significantly lower than the 3.4 per cent growth recorded the previous month. Like-for-like retail sales were down 0.1 per cent in value terms on the year.
According to the BCR, although seasonal changes gave sales of clothing and footwear a boost at the beginning of October sales quickly tapered off. Sales of food and drink remained steady.
Director of the BRC Stephen Robertson commented: ‘The disappointing figures are a reminder of the difficult economic realities many are still facing. Falling consumer confidence means people are limiting spending to essential items and are cautious about committing to big-ticket and discretionary buying.’
David McCorquodale, Head of Retail at KPMG consultancy, asserted: ‘The recession may officially be over but it will take a little longer for consumers to feel they can spend freely again. The disappointing sales figures for October indicate that winning share of the Christmas wallet will be just as competitive over the next two months as it was last year.’
Last week a survey conducted by GfK NOP showed that consumer confidence in the UK was at a six month low. Unfortunately, until more stock can be put into signs of economic recovery the situation is unlikely to improve.
As of 9:55 am
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