Retailers Hit by Worst Fall in 10 Years ; ECONOMIC UNCERTAINTY Surveys Add to Fears That Conflict in Iraq May Undermine Any Nascent Recovery
Philip Thornton Economics Correspondent, The Independent (London, England)
THE HIGH street boom ended with a bang last month as sales volumes fell at the fastest rate for a decade, according to a survey of leading UK retailers published yesterday.
The Confederation of British Industry said it was a clear sign of the impact of the uncertainty over the war as the polling ended the day before the outbreak of hostilities.
The CBI said it was the lowest balance since July 1992, when the economy was emerging from recession and was the first "significant" fall since January 1999.
The war also prompted manufacturers to retrench last month - a picture that was reflected in the eurozone, the United States and Japan.
The gloomy surveys will add to fears over the likely length of, the conflict in the Middle East and how much that will undermine any nascent economic recovery. The figures are likely to alarm the Bank of England, which has indicated it will cut rates again if there is renewed fears the UK is heading for recession.
However, the financial markets ignored the impact of the data to push stocks higher and cut the price of oil, gold and bonds in a marked reverse of previous days' trading.
The FTSE 100 closed 71 points or 2 per cent higher, the oil price in the US came close to breaking back though the $30 a barrel barrier and gold fell by almost a dollar to $334 an ounce.
The CBI said sales growth had stalled in almost every corner of the high street with only retailers of DIY and hardware experiencing significant sales growth. "Sales of duct tape perhaps," joked one analyst.
Ian McCafferty, the CBI's chief economic adviser, said: "These results confirm our fears that consumer confidence has been affected by uncertainties surrounding the war in Iraq, the impending tax rises and worries about the housing market."
Significantly, retailers have abandoned their traditional optimism for the future, forecasting zero growth in sales over …
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Publication information: Article title: Retailers Hit by Worst Fall in 10 Years ; ECONOMIC UNCERTAINTY Surveys Add to Fears That Conflict in Iraq May Undermine Any Nascent Recovery. Contributors: Philip Thornton Economics Correspondent - Author. Newspaper title: The Independent (London, England). Publication date: April 2, 2003. Page number: 19. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.
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