The retail sector suffered its first dip in sales since May 2003 as the ‘British Summer’ begins to take its toll
The Office of National Statistics said retail sales dropped 0.4% in July 2004 after a disproportionate rise during the previous month.
Many blame recent bad whether for the slump, which has seen Britons spend the summer indoors.
The wet summer has hit clothing and footwear sales the hardest with sales down 2.7% from June to July.
Many reasons for the slump have been suggested as well as the bad weather.
The hang over from the Euro 2004 football tournament, felt acutely throughout many retail sectors, has seen a massive reduction in sales of England shirts, alcohol and wide-screen televisions.
The British Retail Consortium has also blamed high interest rate rises which could well be taking their toll on the high street.
Richard Lowe, the director of retail and wholesale sectors at Barclays, said, “While this may be the first indication of a slowdown in the consumer sector following recent rises in interest rates, it is dangerous to lay too much reliance on one months figures.
“These can reflect numerous factors and, in this case, may have been affected by the wet weather and Euro 2004”
However Andrij Halushka, an economist at the Centre of Economics and Business Research, was confident that the drop in retail sales would prevent any further interest rate rises.
“Today’s data may calm the markets, indicating that the UK consumer boom may be finally over and the BoE will not have to continue raising interest rates aggressively.
