Three more gloomy stats out this morning: The Office of National Statistics said inflation jumped from 3.3% to 3.8% in June – a ten-year high. The British Retail Consortium concluded that May’s increase in high street sales was indeed just a flash in the pan, as like-for-likes fell again last month. And to cap it all, the Royal Institute of Chartered Surveyors reported that monthly house sales have hit their lowest level since their surveys began. Which was back in 1978…
The rise in inflation will probably be no surprise to most of us: we’re all seeing the effects at the fuel pump and the checkout. But the figures are still alarming: the Consumer Price Index last hit 3.8% back in January 1997, and is now running at almost double the Bank of England’s 2% target – bad news for Chancellor Mervyn King at a time when the last thing he wants to do is raise interest rates. And the worrying aspect of the figures is that even core inflation – which strips out the volatile stuff like fuel and food – is running at 1.6%, the highest level for 12 months. Some economists are now predicting that CPI could hit 6% before the year is out...
Retail sales also remained pretty much flat after May’s unexpected boost. Although total sales were up 2.1%, thanks to new store openings, the like-for-like figure was actually 0.4% down on last year. Furniture and homewear continues to struggle, while clothing and footwear sales also fell in June. In fact, it was only food and drink that saw any increase in sales, and that was largely because the weather was so miserable last year that none of us wanted to leave the house to get the shopping in.
And then there are house sales, which continue to fall (albeit at a slightly slower rate than the previous two months – hey, we’re glass-half-full types at heart). Apparently RICS members recorded an average of 15.3 sales in the last quarter, so they’re flogging a measly 5 houses a month. The industry’s suffering from a double whammy – a third of surveyors said they’d seen a drop in demand, while those that want to buy are struggling to get a decent mortgage. (With the number of gloomy predictions RICS produces these days, it's a wonder that all their members aren't queuing up to jump off a cliff)
After a relatively positive start to the week (with Santander swooping in to buy Alliance & Leicester, albeit on the cheap), it’s enough to make us feel rather gloomy again. Perhaps we should cheer ourselves up by taking a leaf out of 1970s surveyors’ book, and relaxing with some Blue Nun and a bit of black forest gateau.
In today's bulletin:
House sales hit an all-time low
Broadband gets broader for BT
YouTube users safe from Viacom
Leadership Week: The British Army's Brigadier Andrew Jackson
Golf: a fairway to seal the deal?