UK Shoppers Reined In By Weather And Rates

08 September 2004

Torrential rain and steady hikes in interest rates have dampened down the usual enthusiasm of UK shoppers this summer and raised fears of a cool winter of spending.

The British Retail Consortium's latest report shows a rise of just 0.6 percent in sales from July to August and a 3.2 percent rise over last year.

The disappointing figures prompted this warning from the trade association's chief, Kevin Hawkins: "The consumer economy is increasingly fragile in the crucial run-up to Christmas and cannot sustain another rise in interest rates."

Hawkins is backed up in his assessment by Philip Shaw at international finance specialists Investec who says shoppers' reluctance to spend on household goods could be a sign that house prices are finally levelling or even falling in response to increases in mortgage costs.

The same retail sales phenomenon is also being seen across the Eurozone, which analysts say has been brought about by a nine percent unemployment rate, the highest for five years.

Data sourced from:; additional content by WARC staff