LONDON, Nov 18: The outlook for British consumer spending is a little bit better than last year and retail sales are recovering slowly, although it will not be a boom Christmas, Bank of England Governor Mervyn King said on Friday.
King said retailers had been hurt last year by a marked decrease in consumers’ disposable income, but retail sales were now picking up, albeit slowly.
I think people actually have a little bit more to spend this year — not a lot — but a little bit more. And we are beginning to see retail sales recover slowly, King told local broadcaster BBC Radio Derby in an interview.
There’s nothing terribly exciting going on, so it’s not going to be a boom Christmas. But we are beginning to see some slow, steady pick-up in retail sales, he said.
The BoE predicted in its quarterly inflation report this week that consumer spending would stay subdued in the near-term, having slowed sharply since the end of 2004, but that it would then pick up, helped by a gentle housing market recovery.
Official data on Thursday showed retail sales rose for the third month running in October.
For now, the Monetary Policy Committee appears to be in wait-and-see mode before the crucial Christmas shopping season and New Year wage round and looks set to leave interest rates at 4.5 per cent for the next few months.
Analysts are divided about what the next direction in borrowing costs will be.—Reuters
