Housing market continues to slow....

EdInvestor

Indeed they don't, but since they decided to focus just on controlling inflation, interest rates seem to have got both lower and more stable.Jolly good thing too IMHO

meanmachine_2

Editor wrote:

Indeed they don't, but since they decided to focus just on controlling inflation, interest rates seem to have got both lower and more stable.Jolly good thing too IMHO

Well, they focus on a version of inflation - the CPI. Not really the same thing, and the reason why a whole generation have been prevented from getting on the housing ladder.

Whether 8 years of growth can be maintained remains to be seen. And is it stability or just one long boom, followed by one ginormous bust (matron!). We shall see.

deemy2004

John_M_Business wrote:

Firstly - there is talk of a recession on the High Street... because more and more people are buying online. The online merchants I work for are having a 'field day' when it comes to growth - so the slack has to be taken somewhere else: cue the high street. Therefore there is no chain reaction, just a paradigm shift in retailing.

.

Sorry but the retail sales statistics take into account online shopping So yes there IS a recession in retailing as it has experienced 2 negative quarters.

meanmachine_2

deemy2004 wrote:

Sorry but the retail sales statistics take into account online shopping So yes there IS a recession in retailing as it has experienced 2 negative quarters.

Yes i think the term "high street retailer" has been taken a little too literally.

Consumer figures that didn't take all forms of consumption into account would be a little redundant.

However, I do think we get an awful lot of overblown bleating from retailers just before the BoE decides rates. Hmm, wonder why that is?

I think at present things are bad, but not quite as bad as certain companies would have us think.

deemy2004

The housing market slowdown is rippling through the economy which will feedback into further slowdown / falling house prices which will cause even bigger ripples eventually if they can't halt the chain reaction would lead to a full blown recession and housing market crashette.

The problem is, that unlike the late 90's when the government went on a spending binge to overt a recession, this time the budget deficit does not allow for a spendign binge to occur hence the PAIN will be felt this time.

dougk_2

Its also the case that Internet buying from overseas is increasing as items can be imported cheaper.

Is the high street in recession? Yes it may not be growing at a high rate but its not dropping from what I see. People are changing their habits faster than the retailers , who a large chunk are "stick in the muds".

UK companies in the retail business (WHSmiths is a good example) need to get their act together, thats the problem. You can't use your gift vouchers online, many do allow you to have your goods delivered to an address different to the credit card address (i.e when you work, how do you get your parcels?), and then they charge you over the top for postage!

However,
Look at Tesco's - made more profit than ever ... The banks the same.

Profit is profit - growth is something different. There are only a finite number of customers, you can't sell to people that simply are not there!

If interest rates drop (like it appears there will be in the next few months), savings rates will drop also.

deemy2004

Annual growth in the unadjusted value of retail sales was negative for the first time since May 1967. Average weekly sales in April were £4.6 billion, 0.1 per cent lower than a year ago.

1967 ??? Have they made a mistake ? Maybe not...

ReportInvestor

WhatInvestment

Nationwide sees consumer confidence fall

"Nationwide has seen a sharp slow down in consumer confidence as evidence grows that the UK public has decided to batten down the hatches.

The building society said that its Consumer Confidence Index fell 9% in May with the the future of the economy and job prospects over the next six months becoming increasingly important issues for those surveyed.

'People seem to be particularly uncertain about the future of the economy, jobs and income,' Stuart Bernau from the Nationwide said.

'With house prices cooling, consumers seem to be feeling less optimistic, tightening their belts and looking to reduce their debts rather than spend on the High Street,' he said.

Of those surveyed, 45% aim to reduce borrowings in the coming months, 3% more than the previous month compared with 9% who want to increase their debts."

\\ Does this mean that Nationwide will go one step further and forecast house price falls for 2005 ?

meanmachine_2

deemy2004 wrote:

Annual growth in the unadjusted value of retail sales was negative for the first time since May 1967. Average weekly sales in April were £4.6 billion, 0.1 per cent lower than a year ago.

1967 ??? Have they made a mistake ? Maybe not...

I can't imagine what state the economy would be in if, for whatever reason, int rates HAD to rise above 5%.

Gah. Doesn't leave the BoE much wiggle room, does it?

So now we have the situation where anything over 4.5% tips us into recession and anything under 4% encourages huge debt.

John_M_Business

deemy2004 wrote:

Sorry but the retail sales statistics take into account online shopping So yes there IS a recession in retailing as it has experienced 2 negative quarters.

I think this speaks for itself:
http://today.reuters.co.uk/news/newsArticle.aspx?type=reutersEdge&storyID=2005-06-08T083234Z_01_CAS830615_RTRUKOC_0_RETAIL-BRITAIN.xml

The BRC - a long-standing Retail consortium that, surprise, surprise, does not include the 'upstarts' - were the ones to release figures.

Yes, this is just before a BOE decision (as meanmachine pointed out) and, yes, they also want to put pressure on landlords for this summer.

However this is not representative of the whole picture (as the article also suggests!) - the signs are actually rather encouraging if read as a whole.