The IMF might have downgraded the growth outlook for the UK but it’s not all doom and gloom.
Figures released by KPMG Retail Sales Monitor and the British retail consortium have shown a 1.5 per cent increase on like-for-like, year-on-year retail sales for September – the fastest rate of increase for 9 months.
Considering that the same data for August was the worst seen since the end of 2011 this is a positive development.
It appears that the ending of the Olympics and Paralympics has combined with the move into Autumn/Winter weather and driven consumers back into the physical and virtual shops.
In September home accessory sales may have fallen at the quickest rate since 2009, but year-on-year online retail sales increased from Augusts 4.8 per cent to Septembers 9.9 per cent. This indicates that people are more willing to spend despite the ongoing economic pressures.
The Director-General of the British retail consortium asserted: ‘After a poor summer for sales, this is a return to growth rates we’ve come to regard as relatively acceptable in these relentlessly tough times.’
Stephen Robertson went on to comment; ‘The improvement has come from the weather and a change in the mindset of some customers. This September’s colder conditions contrast sharply with the heatwave a year ago, giving clothing and footwear sales a major boost as shoppers stock up early on coats, boots and knitwear. Children’s clothes and shoes did particularly well in September, partly because many people left back-to-school buying later this year as a result of competition for their time in August […] there are signs that people are acclimatising to the new realities […] difficult has become the new norm. Customers are still cautious but less fearful than they were. The squeeze on disposable incomes has eased for some and, along with lots of discounts, left them feeling it’s time to stop postponing spending.’
September also proved to be a good month for housing. Although house-prices fell in September the decline occurred at a slower pace than previously and a UK house-price index jumped to a six month high. According to the Royal Institution of Chartered Surveyors credit boosting measures made the outlook appear less concerning to real-estate agents.
Director of the RICS Peter Bolton King said of the results; ‘The housing market was relatively flat during September, but surveyors are optimistic that the run-in to Christmas could see an increase in activity. Despite this, problems still exist and more needs to be done to get the market moving. Although the Funding for Lending Scheme appears to be improving mortgage availability, those at the very bottom of the housing ladder are still struggling.’
The Funding for Lending scheme King referred to was instigated by the Bank of England in August. It aims to provide banks with access to cheaper finance and boost credit in the process.
Despite this measure and today’s more positive data releases, economic turmoil and flagging consumer confidence are continuing to prove difficult for the housing market (and the UK generally) to overcome.
As of 11.30:
The Pound to Euro exchange rate is currently trading at 1.2387
The Pound to US Dollar exchange rate is currently trading at 1.6021
The Pound to Australian Dollar exchange rate is currently trading at 1.5693
The Euro to US Dollar exchange rate is currently trading at 1.2933
The Euro to Pound exchange rate is currently trading at 0.8071
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