Autumn sales are still below par for many stores as retail experts call for a hold on interest rates, according to a new report.
The CBI’s monthly distribution trades survey (DTS) shows that retail sales have cooled since the summer, despite an increase in spending in October.
37 per cent of firms saw sales rise in October, while 26 per cent saw them fall, leading retail experts to believe that growth will balance out at 12 per cent for the rest of November as Christmas approaches.
However, the underlying sales trend is now at its weakest for 18 months, with retailers regard their sales as ‘below normal’ for this time of year, compared to the ‘above normal’ trend for most of 2004.
John Longworth, chairman of the DTS panel, said: “The period of strong spending seen up to the summer is over, with underlying sales growth cooling. Retailers will now be hoping for a boost in the run up to Christmas.
“But there is a great deal of uncertainty about the economic cycle and it is unclear how consumer spending will fare in the months ahead.”
In terms of retail sectors, wholesalers saw sales increase beyond expectation, but believe they will be moderate over the coming month.
Motor traders reported a fall in sales over the last month and a decline of the same scale is anticipated in November.
Suppliers also felt the strain, with retailers increasing their orders in the light of modest sales increases.
Longworth said, “An interest rate increase in November would be damaging and there is no need for the Bank of England to consider a further rise for the foreseeable future. Rates are already at their peak now or very close to it.
“The MPC should reassess the situation in early 2005 when a clearer picture of UK and world growth is available.”
