New Figures Belie British ‘Baghdad Bounce’

26 May 2003

New figures for the UK economy show scant sign of the widely hoped-for post-war rebound.

According to the Office for National Statistics, April retail sales rose just 0.3% in April compared with the previous month, with clothing and footwear sales falling 0.5%. The lower-than-expected increase indicates annual growth of 2.7%, the slowest rate since May 1999.

Meanwhile, the Confederation of British Industry said its monthly survey of industrial trends found no signs of a rebound. Some 40% of participating firms reported fewer orders than usual in May while 11% posted above-normal activity. The 29-point margin of difference is the same as last month.

“So far there is little sign of any ‘Baghdad bounce’,” declared CBI chief economist Ian McCafferty. “The decline in sterling in recent months should help ease the pressures on exporters, but they are having to battle against weak demand in their key markets.”

As a result, the CBI cut its full-year growth forecast from 2.2% to 2.1%, but increased its prediction for 2004 from 2.4% to 2.5%.

Data sourced from: BBC Online Business News (UK); additional content by WARC staff