The economy lurches

We are witnessing one of those retail binges that characterise modern living.

The retailers play games with the public, deciding when to lower prices and offer knock out deals to attract people to the stores. The people play games with the retailers, playing hard to get until the deals on offer spawn exciting headlines.

More people now seem to leave buying what they really really want until after Christmas, reckoning they can buy it more cheaply.
Families that have lost the knack of self entertainment, bored by the vanilla viewing scheules for the holiday and by the endless repeats on TV, are inclined to venture out for some retail therapy, walking a little of the excess off around the shops.

It produces retail sales figures that become ever more difficult to interpret. Stores sales space has been expanded. The internet now takes a lot more shopping traffic. Individual sales days can see huge turnover and big footfall. Other weeks can seem poor. A few shops groups trade very wlel, others do badly.

The likelihood is that the retail sales will slow after the Christmas and January sales have seen a last consumer fling. People’s incomes are under pressure, as higher mortgage costs kick in for some, and higher taxes and higher petrol, heating and food bills for all. It is going to be more difficult arranging the personal loan or the bigger mortgage than it has been for decade.

The credit crunch has not gone away. The banks should be at their least helpful to customers wanting to borrow ahead of their year ends. When they relax a little it will still be at lower levels of advances that peolpe have been used to. Valuers will become much more cautious about the values of properties when assessing their worth to support loans.

This Christmas and New Year sees more people than ever taking a long break from the office. The economy may weaken over the turn of 2008, and we may find the going gets tougher in the new year.

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One Comment

  1. Steven_L
    Posted December 28, 2007 at 3:24 am | Permalink

    “The likelihood is that the retail sales will slow after the Christmas and January sales have seen a last consumer fling” (JR)

    I’ll be buying all the nice things I want between now and New Years Day and then only spending on essentials such as diesel and lager.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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