View more on these topics

Retail sales growth points to rate rise

Retail sales grew solidly in October, rising at their fastest year-on-year rate for 18 months, business leaders reported yesterday, prompting fears that the Bank of England will raise interest rates this week.

Figures from the Confederation of British Industry show sales grew in September but by less than had been expected. October&#39s performance was much stronger and outstripped expectations.

Some 21% of retailers said sales were down compared with October last year but 56% said they were up. The balance of +35% represents the fastest rate of growth since April 2002 and compares with the 28% that had been expected.

The underlying trend, which irons out month-to-month volatility, also shows sales growth at its strongest for 11 months, though it is still just below the average of the last 10 years.

The recovery was broad based with year-on-year sales growth in all but one of the retailing sectors. Grocers saw the strongest growth followed by sellers of hardware, china and DIY goods. Only shops selling durable household goods, such as washing machines and televisions, saw sales fall compared with a year ago.

Looking ahead to November retailers expect sales growth to pick up further. The balance of firms expecting sales growth, at +37%, is the highest since May 2002.

CBI chief economic adviser Ian McCafferty says: “This is a solid pick-up. The change to colder, more typical autumn weather, and good sales of seasonal ranges have boosted some traders.

“With rising house prices, low unemployment and consumers happy to borrow at record levels retailers believe this stronger growth will persist. After the knocks from tax rises and the Iraq war earlier in the year, this revival in consumer confidence is good news for the wider economy.”

On interest rates, McCafferty adds: “Clearly the pick-up in the global economy has strengthened the case for a reversal of the precautionary cut made by the bank in July, which was intended to give the UK some insurance in case the global economy took a further turn for the worse.

“But the recent recovery in the wider UK economy is in its early stages and is still fragile. The bank needs to ensure that it does not damage business confidence with a series of quick rate rises. The MPC must make clear that in the coming months it will not choke off a recovery that has still not fully taken hold.”


Gravy train ready to board with no heating necessary

From Warwick TidyBritish Rail is pleased to announce the train that will be leaving Canary Wharf on October 31 2004 is now available for bookings. The train, named &#39Regulation Juggernaut&#39, will have a bias towards FSA officers as there will be plenty of gravy on board and is already known as the gravy train. Executives/employees […]

Trigold announces white labelling success

Trigold has announced that there are now 40 customised versions of its Prospector Plus mortgage sourcing software in the mortgage market. This white labelling provides mortgage networks and principles with the opportunity to take all of the core functionality of the Trigold software and customise it to their exact requirements. It is a way to […]

Mortgage Next offers discounted Openplan mortgage

Mortgage Next is launching the Woolwich Openplan Mortgage with a two-year stepped discount, available exclusively from Mortgage Next from November 3. The Openplan mortgage, which brings together borrowings, savings and current account, is available with a two-year stepped discount of 2.10% in year one and 1.70% in year two. This gives a payment rate of […]

Directory enquiry services getting it wrong, says Which

A Which? investigation has found three-quarters of the new directory enquiries services contacted are unable to answer simple enquiries correctly. Which? researchers phoned 16 directory enquiries services five times each. Three residential numbers were requested – two with full addresses and one with the area only. Two business numbers were also requested and the researchers […]

Guide cover

Guide: Johnson Fleming produces auto-enrolment checklist

For a job as big as managing the auto-enrolment changes, it’s important to know what has been completed and what still lies in front of you to give you the reassurance that everything is in hand. Getting the planning and project management right at the outset can help you see the path ahead and ensure everyone knows their roles and responsibilities. To help with this, Johnson Fleming has produced a checklist outlining every step that needs to be taken when preparing for auto-enrolment.


News and expert analysis straight to your inbox

Sign up