The retail sector is running out of steam says Ernst & Young ITEM Club
Today’s figures support our view that Q4 GDP will be flat, if not slightly negative
But we expect prospects for UK consumers to get progressively better over the coming year
Nida Ali, economic advisor to the Ernst & Young ITEM Club, comments on today’s retail sales figures:
“The last couple of months have seen a visible loss of momentum in the retail sector, and today’s figures are a continuation of that trend. But with household finances still under pressure it would be unrealistic to expect the steady increase in retail sales, of earlier in the year, to continue indefinitely.
“As expected, sales volumes have fallen by more than 0.5% in the fourth quarter. This supports our view that even in the best case scenario, Q4 GDP will probably be flat, if not slightly negative.”
Mark Gregory, Ernst & Young’s chief economist added:
“Looking ahead, there is some solace in that the situation of UK households has improved considerably since this time last year. Employment has remained strong while inflation has eased significantly. As such, we expect prospects for UK consumers to get progressively better over the coming year.”
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