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As Gordon Brown urges the rest of the world to follow his lead and pump billions of pounds of tax payer’s money into the banking system you could be mistaken for thinking that he has gone from zero...
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Friday 18th May 2007
Britain's retail sales fell by 0.1 per cent during April thanks to falls in household goods purchases, figures from the Office for National Statistics (ONS) show.
The slight month-on-month slip was not expected by analysts but has failed to prevent an increase in quarterly growth. Sales in the February to April period increased by 1.2 per cent on the previous three months, compared to a 0.5 per cent growth in the January-March quarter.
Furthermore the year-on-year analysis of monthly figures shows annual growth of 4.8 per cent, the best improvement since November 2004.
Household goods stores reported a three per cent fall in sales and are responsible for the monthly fall. Their disappointing sales were offset by grocery sales, which grew by 4.9 per cent over the year.
Today's figures are unlikely to influence the Bank of England's next interest rate decision because recent results have shown short-term volatility, Howard Archer of research firm Global Insight said.
However, he warned that consumer confidence would be key to whether or not the monetary policy committee chooses to raise rates further – possibly to six per cent.
"If consumers spend fairly freely, then it is very possible that interest rates will reach six per cent as it will likely boost firms' confidence in their pricing ability and increase the risk that they will try and push through more price increases," he said.
"Nevertheless, we still suspect that the upside for consumer spending will be limited overall through the coming months and that this will help to limit the peak in interest rates to 5.75 per cent. We believe that higher interest rates, moderate real disposable earnings growth and rising debt levels will increasingly weigh down on spending."
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