Mild weather blamed for slowing retail sales growth
British retail sales slowed in November as the mild weather pushed annual growth in clothing and footwear sales to its lowest level for three years.
However, economists predicted December would show an improvement with the underlying trends helped by continued strength in the housing market. New figures from the British Bankers' Association yesterday showed the biggest monthly increase in mortgage lending on record.
Retail sales in November rose by 0.1 per cent on October, according to the Office of National Statistics. This was slightly weaker than forecasts of 0.2 per cent growth. Sales in November were up 4.8 per cent on the same month last year, roughly in line with forecasts.
Separately, John Lewis revealed that its department store sales in the week to 14 December were up 3.2 per cent on last year, still below its 6.6 per cent sales target.
John Butler, an economist at HSBC, said the official figures were not alarming and the trends were still positive for Christmas. "Every time stores try to ease off the discounting, sales fall," Mr Butler said. "Then they start again and things pick up."
Simon Rubinsohn, an economist at Gerrard's stockbrokers, said any attempt to push up prices was being met with a "buyers' strike". He added: "The figures may not, in truth, suggest that consumers are throwing in the towel but the numbers do highlight just how price-sensitive shoppers are becoming."
Though there have been signs of a slowdown in the housing market, fresh figures yesterday from the British Bankers' Association showed mortgage lending rose by £5.9bn last month, the strongest monthly rise on record.
Ian Perry, of the Royal Institute for Chartered Surveyors, said: "There is a lot of speculation at the moment that the housing market is set to crash. We believe a slowdown in house price inflation is more likely."
RICS forecast house prices would rise by 11 per cent over 2003 and by 5 per cent in 2004. The Nationwide Building Society yesterday predicted a "soft landing" for the housing market next year. It forecasts prices to rise by 10 per cent in 2003.
The ONS also reported public net borrowing last month of £6.7bn, bringing the cumulative total for the year to date to £17bn. This is not far short of the £20bn deficit forecast by the Chancellor, Gordon Brown, in last month's pre-Budget report.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies