UK Retail Sales Drop Sharply in March

This result frm a CBI survey is right in line with other data coming in from the UK, including the 'cooling' in the housing market.

UK retail sales fell at their highest annual rate in more than a decade in March, as consumer confidence was damaged by fears of war in Iraq, according to a CBI survey released on Tuesday. The group's distributive trades survey found 28 per cent of companies said business was up on March last year, while 41 per cent said it was down - a balance of -13. That is the worst result registered since the UK economy was emerging from recession in 1992, and the first significant fall since the start of 1999. The survey was carried out just before the start of military action in Iraq. The CBI said demand weakened across all retail sectors except hardware, china and DIY materials, where sales growth increased. Overall, sales were "well below" average for the time of year, and the outlook remained "downbeat". "These results confirm our fears that consumer confidence has been affected by uncertainties surrounding the war in Iraq, the impending tax rises and worries about the housing market," said Ian McCafferty, the CBI's chief economic adviser. The survey also comes hard on the heels of official figures which revealed that retail sales growth in February slowed to its weakest rate in more than three years, raising fears that the economy could be set for a period of below-average growth and higher inflation. Analysts said that the survey, combined with Tuesday's gloomy manufacturing PMI data, recent evidence of a cooling housing market and eroded consumer confidence linked to the war in Iraq, would likely increase pressure on the Bank of England to cut interest rates further.
Source: Financial Times
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