Boost in retail sales supports view that recession will be avoided, says BCC
17 Feb 2012
- January 2012 retail sales volumes: up 0.9% on the month, up 2.0% on the year
Commenting on the retail sales figures for January 2012, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The retail sales figures for January were far stronger than expected. After the December increase, which was affected by heavy pre-Christmas discounting, most analysts expected a small fall in January. This increase shows that the economy is slowly improving and supports our view that GDP will return to positive growth in the first quarter of the year. The figures support the view that inflation in the high street is falling. As this trend continues, we expect to see further modest increases in consumer spending later this year.
“But we mustn’t shrug off the serious challenges facing the UK economy, particularly while tough fiscal measures are being implemented by the government, and the problems in the eurozone remain. Despite the welcome boost in retail sales, we cannot simply rely on consumer spending if we are to sustain growth in the economy. Increasing net exports and business investment is crucial to driving recovery in the months and years ahead.
“The government must stick to its deficit reduction plan, but more must be done to reallocate priorities within the overall spending envelope. Businesses expect firm action in key areas such as credit easing, cutting red tape and scrapping increases in business rates.”
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