UK retail sales figures disappoint for January
Retail sales figure in the UK fell 1.8% in January, compared to December, although the figure was actually a 0.9% increase year-on-year. This is the sharpest monthly fall in UK retail sales since February 2009 and has led to renewed concern about the underlying state of the UK economy. When you also consider that December sales were revised downwards from a 0.3% increase to 0.2% decline month on month, and from a 2.4% annual rise to a 2.1% rise, the situation seems to be getting worse.
This is a bitter blow for those who had hoped the UK economy had turned the corner and there are growing concerns that the 0.1% increase in economic activity in the final quarter of 2009 could be revised downwards. The Bank of England recently took away the quantitative easing program amid hopes that the economy had turned the corner but Mervyn King, the Gov of the Bank of England, left open the door to a reintroduction of the quantitative easing program in the short term.
While the data regarding the UK economy is still very mixed at the moment there is definitely a negative bias. Quite what the UK government can do in the short-term to reduce the strain on UK consumers and UK businesses remains to be seen.
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