Retails Sales Down In May
As we move into June and approach what many expect to be another rise in interest rates, the news from the high street seems to be indicating that recent rate hikes may finally be having some effect.
Even though the figures were effected by wet weather throughout the month of May, the fall of 1.8% compared with May 2006 is a welcome relief to the Bank of England. So have interest rates now peaked in the short term?
While the news of falling sales has been well received, the misery seems set to continue for home owners, with many believing that further interest rate increases are necessary. The property market has led the economy higher and even now is still showing strength when all around are struggling. Obviously this cannot go on forever, although the Bank of England seem determined to end this “over exuberance†as soon as possible.
As covered in earlier articles, the recent rise in interest rates has also given the Banks the chance to increase loan charges by more than savings rates, thereby increasing their profit margins at a stroke. This is another aspect of the current banking practices which may well come under the microscope of the government, in its bid to rid the financial sector of “sharp†practices.
While one swallow does not make a summer, there are signs of a shift in consumer trends and confidence. Lets just hope that the authorities can manage a “soft†landing for the economy.
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