The disappointing retail sales figures should come as no surprise to readers of this blog. We are living through an entirely predictable economic slowdown brought on by Mr Hammond’s fiscal squeeze and by the Bank of England’s fierce monetary squeeze.
We need a pro growth budget. We need the Bank of England to follow the examples of the Fed, ECB, People’s Bank of China and Bank of Japan and relax money policy to promote growth. Why is the Bank so out of line? Can’t it see the way it has cut our growth rate?
January 9, 2020
Talking of the Bank of England, itās good to see Mark Carney to admit finally that it doesnāt make any sense for a/the world leading financial services centre to be regulated by rules developed in Brussels
January 9, 2020
Perhaps he would prefer it was done by an organ of the UN-his next port of call-so that green criteria can be imposed on all lending and investing activity.
January 9, 2020
Clearly not Brexit. Rolls eyes.
January 9, 2020
@Andy; Indeed clearly not Brexit, considering Brexit has not happened yet (due to the antic of those you support) how could it be the fault of “Brexit”?…
January 9, 2020
Andy, I suppose most commenters on here anticipate that you will pick up on any bad news and blame it on Brexit. But bad news would happen whether we are in, partly in, or out of the EU. If you can’t see that, then expect us to continue laughing at you rather than being converts to your corrupt EU dystopia.
January 9, 2020
Brexit must be seen to be a failure even if the treasury has to engineer it.
I see the new EU president is insisting we have freedom of movement, EU laws and a Level playing field to get a trade agreement. Just like Canada and South I don’t think.
January 9, 2020
And to coin a phrase “She would say that wouldn’t she”….just hope that Boris sticks to his end of 2020 plan or WTO if the EU can’t get it together…
January 9, 2020
I doubt that it will take any “engineering” at all.
You do a great disservice to those working assiduously to minimise its adverse effects by smearing them as you do.
January 9, 2020
What “adverse effects” are those, then, Martin? The same terrible effects visible in the other 165 states in the world which are not in the EU? No wonder you didn’t win the Referendum.
January 9, 2020
The only people working assiduously as you put it are the wrecking remainiacs.
January 9, 2020
I trust the EU will increase minimum wages across the EU to match ours. No?
January 11, 2020
The European Union does not fix minimum wages. They are sovereign matters for the nations, like immigration policy and border security.
Would you rather that they were not?
January 9, 2020
Isn’t it obvious? The banker cartel is determined to punish us for Brexit. Their political lackeys failed to stop it in it’s tracks so they will do their best to ruin it so that others do not rebel.
January 9, 2020
People decide how to spend their money not central banks. They have decided to spend less not because they have less to spend (your naive assumption) but because they have more effective ways of using their money. They maybe saving more. They may have decided to pay back debts already built up.
You’re making invalid assumptions about the behaviour of people. You assume we live to spend. You encourage more spending. That’s Keynesian ‘pushing the string’ politics. That’s not your role as a politician. Your role is reform of a massively wasteful public sector not promoting more spending simply because it improves your party’s popularity
Promote productivity by slashing regulations and cutting business taxes.
Promote reform of backward State organisations
You won’t do any of these things simply because your party is playing to the leftist gallery of employment rights and high State spending.
You refuse to take decisions that you know will upset the left, the BBC, CH4, the unions, Labour and their London based leftist allies
You have become a hostage of the left. Have the courage and will to break free from their grip you can then fire up a massive reform programme, confront the inevitable backlash from the parasitic Labour client state and re-energise the material wealth creators that is the private sector
Either endorse reform or admit that you’ve capitulated to Labour’s client state
January 9, 2020
Very well said.
January 9, 2020
Well said
January 9, 2020
I agree. The worst of it is, they have a clear majority and 4-5 years in which to achieve it all.
Get rid of the Climate Change Act.
Cut International Aid.
Cancel or cost limit HS2 and Hinkley Point.
Now that Richmond is LibDem, build Heathrow Extension with the money saved from the above.
January 9, 2020
your comments have my full support
January 10, 2020
Cheers. I just wish our government would get on with it.
January 9, 2020
Dominic, Exorbitant stamp duty does mean that – particularly young people – have less to spend.
January 9, 2020
John, it doesn’t matter how low the interest rates may be. People still have to repay the capital.
With confidence low for various reasons, and anxiety about the future, people have understandably had enough of debt.
Then there’s the matter of many goods, imports, being dearer, owing to weak Sterling. I wonder what caused that?
January 9, 2020
Mark Carney spent the last three years talking down the pound.
January 9, 2020
He had not said a word, during the very short interval when Sterling fell precipitously on 23-24th June 2016, had he?
January 9, 2020
He said many words, as predictions, before 23rd June 2016, Martin.
January 10, 2020
They were contingent on Cameron keeping his word to invoke Article Fifty on June 24th.
He did not do that.
But I suggest that you revisit what he actually said anyway, instead of putting words into his mouth as ever.
January 9, 2020
He made very clear what he thought about leaving the EU.
He could have said brexit was of no consequence.
He could have said it would be a great opportunity.
But he didn’t.
So he didn’t need to say anything in that period because he had already set the scene.
January 9, 2020
@Mic
Cast your mind back – he and Gideon spent the run up to the 2016 referendum telling us that a leave vote would result in economic Armageddon.
It was commonly referred to as Project Fear.
January 9, 2020
Martin, People are usually anxious about the future – it’s part of the human condition. I remember my parent’s friends being anxious about nuclear war. Lots of people were anxious about climate catastrophe by 2017. It simply depends on how successful some people like Prince Charles, Mark Carney, etc, are in polishing their . . er . . axes. And of course suitable mugs to fall for it.
January 9, 2020
The Bank is conditioning people and the nation for trying times ahead- a bit like forward guidance will do for the markets.
January 9, 2020
Do they want the UK to thrive outside of the EU, or do they have a different agenda?
January 9, 2020
Shirley, They have a different agenda. As we have seen for the last three and a half years.
January 9, 2020
Thanks for fixing the scroll bar on the dialogue box – -now how about the same with Brexit?
January 9, 2020
Mark Carney will be moving on to his next sinecure soon and taking his forward guidance with him, so hopefully his successor will act less like a political activist and more like a central bank governor.
January 9, 2020
Bob – – hopefully the loudhailer shouting ‘Jump’ in his ear to which he did, will be no longer necessary?
January 9, 2020
A less āeconomic theoryā explanation might be that people have run out of money and the ability to take on more credit.
They may also have simply fallen out of love with consumerism and feel nauseated by the expensive, tatty rubbish being foisted on them.
Or be sick and tired of internet delivery shenanigans…then find their local High Street turned into a charity shop wasteland.
The quality of food has declined horribly and I imagine that kids do not eat fruit and veg because it is mostly sour, hard as bullets or tasteless and mushy.
No doubt the best quality produce is being siphoned off to China.
And much production knowledge in the uk has been forgotten/lost…artisan companies just canāt cut it ( sausages, cheese etc ) and their goods are very dear.
January 9, 2020
I wonder if Peter Van Leeuwen actually likes Dutch tomatoes?
January 9, 2020
..and again……. interest rates are set at historic lows and very much lower than they would have been had we not suffered Brexit. When the economy started to tip into recession thanks the the fear of Brexit the normalisation was cancelled .
This was a prodigious event in the expectation of household incomes and the created the consumer boom that supposedly “confounding..blah blah .. experts..blah blah..”
Brexit is a huge macro economic event, the treasury , under great pressure to lie about it put the worst case as about 10% over 15 years – a disaster. There is no way to repeat the 2016 trick and the sort of reckless money printing John Redwood wants is entirely irresponsible.
We will simply have to learn to live with a lower growth trajectory – its stupid , its maddening and it will hurt many many people , but thats what you voted for
January 9, 2020
We can all pick our ‘year zero’.
I think it started when Blair threw open the borders, actually.
We said time and time again we didn’t like it but were ignored. Worse. Useful chumps in the Tory party joined in the demonisation of their own supporters who objected to it (recognise yourself ?)
This begat Brexit.
Well done !
January 9, 2020
Newmania, Wrong. Our interest rates are comparable with other economies, so Brexit is not the issue. Moreover, the UK economy, measured by annual GDP growth, has not tipped into recession (source: Trading Economics). Try again.
January 10, 2020
NickC
Interesting perspective of course Brexit is part of the explanation for the low growth we have had even lower than Eu more or less for the past three years
January 10, 2020
If it was lower than Germany it would be in recession.
January 9, 2020
According to the BBC, Helen Dickinson, chief executive of the British Retail Consortium, said: “Twice the UK faced the prospect of a no-deal Brexit, as well as political instability that concluded in a December general election – further weakening demand for the festive period.”
Is she seriously suggesting that people bought fewer fish fingers or put off the purchase of a new phone (or whatever) because they were worried about a no-deal Brexit?
January 9, 2020
Kenneth, The BRC is notoriously Remain. No wonder the BBC quotes them. In their publication ‘BRC – the tariff roadmap’ (pdf), the BRC claimed that without a “deal” tariffs on imports from the EU could be as high as 46% for cheese or 21% for tomatoes. The BRC went on to claim that “if the UK were to default to WTO tariffs on UK food imports from the EU, [the average] would be 22%”. The utter idiocy of the BRC is beyond compare.
January 9, 2020
There is pressure by environmental groups against what they say is excessive consumption of consumers goods, which may be having an impact.
Whilst I don’t agree with their politics behind their pressure I do admit to being personally rather thrifty, so I can’t claim to disagree with their views. This may be having an impact.
January 9, 2020
I’m no eco-nut but I’m the same – and have become more so over the past few years. (My mobile, for example, is ten years old.) Our resources are finite and we should conserve then. I like much of what Sir John says but I think he is wrong to promote growth through consumption. I wish politicians would focus more on GDP/capita.
January 9, 2020
Indeed and also made worse by increasing tax complexity, increasing red tape, lack of government vision, daft employment laws, lack of competitive banking, until recently the threat of Corbyn/SNP, expensive unreliable energy due to idiotic government policy ……
January 9, 2020
Talking of unreliable energy there is the usual half baked discussion of āreliableā tidal energy and the need for better electricity storage systems in the Telegraph letters today.
We can indeed store renewable electricity but such storage wastes about 20% of the energy and the storage systems, the ābatteriesā, are very expensive to make, maintain and often depreciate very rapidly too. A ābatteryā to store just 5p of electricity might cost perhaps Ā£40 and might even depreciate at up to 4p per single discharge too. This combined can easily doubles the cost of the electricity. Renewable energy is already expensive and intermittent, storing it makes it even more expensive.
As to tidal power it is āpredictableā but it is not āon demandā, you have to use the energy between high and low tide or it is wasted it as the new tide comes in. Also you have spring and neap tides which gives a large variation in output every few days. Above all you generally have to enclose a very large area or sea to get any significant output. Plus this has to be able to withstand storms and weathering. This when we cannot, it seems, even afford to protect much of the UK coast line from errosion. Finally the enclosed areas silt up and need dredging.
Yes it can all be done but only at vast expense and with tax payer subsidies. So why do it when fossil fuels and nuclear are a far better solution and do not need these expensive and wasteful electricity storage systems? This particularly when it now seems very clear indeed that the sensitivity of the climate to CO2 has been hugely exaggerated and extra CO2 even has many positive effects in greening the planet and increasing crop yields too? Stop all tax payer subsidies for such lunacies until the are cost effective (if they ever will be).
January 9, 2020
@LifeLogic
Lets remove all the CO2, plant life will die, vegans will then starve like the rest of us. š
January 9, 2020
Well to get to zero CO2 then all breathing (human and animal) would have to be banned for a start. Even for St Gretaās two large (meat eating?) dogs.
January 9, 2020
Easy to make generalisations, indeed I think you just press a ārepeat rantā button. Letās have a specific list of, not generic, H and S, HR blah, all the actual red tape and regulations that can be binned and no doubt our host would be pleased to take it it the appropriate Ministers.
Incidentally there is more competition in UK banking with the Challengers etc than ever. Please do not use your personal circumstances as an excuse to try and taint a whole industry.
January 9, 2020
Sure loads of competition that is why HSBC can it seems get away with charging 40% on personal all personal overdrafts and Lloyds nearly double that. This while paying less than .5% on deposits. The same rate for all good risk or poor. How can that work in a competitive market?
When I first got the premier Ā£20k OD facility they charged base plus 2.5% and now I am a far lower risk now than I was then so why is it going up to 40%. Not that I will use it at that rate.
January 9, 2020
Same here LL. I had premier card at 2.5 plus base then they increased it to credit card rate 22% and now 39.9%. They even want a Ā£100 annual fee
I’ve cancelled it.
January 10, 2020
I see my deposit account with HSBC pays 0.2% so 40% is 200 times more. Or a gross margin of 20,000%. Hardly a sign or real or fare competition in banking, more of a sick joke. Furthermore it seems this is actually encouraged by the FCA. Under the charge of one Andrew Bailey soon to take over at the BoE. What does he thing of this does he approve these rip of lending rates? Or did he just not notice. If he wants to earn he new salary of circa Ā£500k he need to get the banks working properly with some real competition.
January 9, 2020
Nig 1, The reason that commenters like Lifelogic have to repeat themselves about the CAGW hoax and its concomitant phalanx of subsidised unicorns, from Windmills to battery cars, is because no one (in power) is listening.
January 10, 2020
Thank you.
January 9, 2020
Needed a car headlight bulb the other day, it was cheaper to get same day delivery from Amazon than go down to the local Halfords…
January 9, 2020
Indeed the high st. shops are killing themselves. I do not mind paying a bit more but often it is 10+ times more than on line. Reading glasses in the city a distress purchase cost me Ā£29 for the cheapest ones they had. On line about Ā£12 for 6 pairs with no difference in quality either.
January 9, 2020
somebody somewhere will sell whatever you want cheaper than a store operating from premises. Smaller overheads – we need a tax on internet trading to the UK market….
And John Lewis struggling to compete against the lowest price available anywhere – margins squeezed requires much bigger sales levels, more warehousing, more staff etc.
Can’t be done!
January 10, 2020
To use the Halfords analogy used earlier, I recently bought a windscreen wiper from the internet, a Bosch branded item for under a fiver. Halfords price, in a much limited range, was approaching forty quid for a similar item. You really can’t say that price difference is down to bricks and mortar overheads.
There ARE advantages to having a physical presence – the retailer just needs to find them. Taking Halfords again, thee Bike Hut areas in many of there stores are often busy where the rest of the (cavernous) store is tumbleweed-central. My own observations suggest this is down to the fact that people are willing to go to a physical store to get good advice on buying a bike, from a staff who are often very knowledgeable. Whereas the main store is often staffed by people with little interest in what they are selling. Halfords bike retailing is often derrided (no pun intended), but the many stores which DO have a knowledgeable staff are very much cherished and there is keen discussion in online cycling forums in seeking out the best ones.
All of this is perhaps a rather long-winded way of saying that people like to interact with other people, and a happy knowledgeable staff go a long way to being a valuable asset to your business.
January 9, 2020
Good afternoon.
The fiscal squeeze was created and put before the HoC in a budget. MP’s, such as our kind host, had ample opportunity to both comment and vote on said budget. Many MP’s voted for the budget and said fiscal squeeze.
Asking the BoE to lower interest rates so to boost the economy whilst this and past governments have done so much to slow it down. If our kind host wants to see economic growth he might well argue for the government to repeal the Climate Change Act. That and that alone will stimulate growth, employment and the economy. And you do not have to beg, borrow or steal to do it.
š
January 9, 2020
Certainly the insane Climate Change Act need to be repealed but what chance of that? Almost no MPs understand energy engineering or indeed physics or climate science. All but a handful of them voted it through – in an insane act of pathetic virtue signalling.
January 9, 2020
Hammonds idea of punishing car sales with ridiculous un-thought through taxes. Is also holding up well in damaging the UK economy.
A good part of the retail high street collapse is Government directed by a tax system that isn’t equal to all but sets out to manipulate and punish. We keep getting people in power that think un-fairness is solved by compensation and more un-fairness. In stead of stepping back and saying the World is different from Victorian times and can not be run by the same guidelines. Just treat all business and people equal, everyone contributing fairly and the country will thrive.
January 9, 2020
M and S have acknowledged they got Christmas wrong. John Lewis have just moved their Chief Executive on. Excessive business rates, aggressive parking charges and more choice, at a better price etc via the Internet.
We are also seeing people reduce their credit cards debts as uncertainty in the U.K. and memories of a major recession from not that long ago, weigh.
No one I know is cutting back their spending because interest rates are too high. I can get nought per cent for a small fee over 30 months.
Aldi has just had a bumper year and Lidlās is doing well and I know many oeople who gave switched from more expensive brands.
Instead of blaming the BOE you should look at the over inflation council tax rises your government has forced on us, excessive energy bills to pay for an almost useless smart metering system, dividend tax hitting the prudent, chaos with IR 35, pension relief hits etc all reducing our spending power.
Let he without sin, cast the first stone.
January 9, 2020
I have chosen not to do two property developments as bank lending terms and margins were too expensive, onerous and restrictive. With a direct loss of construction jobs and indeed of much needed houses.
January 9, 2020
“…council tax rises…” The Tyranny of the Monopoly. The Original Sin in the Economic Cycle Start.
We shall pray Local Authorities do not have free lunches in Hell.
January 9, 2020
Well, you make a good point about Council tax, which is still, in essence a Poll Tax.
Right wing dogma would have everything paid for by poll taxes, and by shifting the general burden onto local authorities the Government goes some way to this end.
Then there’s the poll tax for people who use the railways, paying the operator’s franchise for them, the BBC Licence Fee, Road Fund tax etc. etc.
January 9, 2020
is that really you Marty? Not an imposter? I agree with you!
January 10, 2020
People might spend a bit more if the VAT rate was cut. It is on virtually everything, and can add substantially to the cost. Its not just goods, but services too ie: eating out, insurance policies, fuel bills, fees for solicitors etc. I could go on, but everyone knows the problem.
I know its a nice little earner for the Government, but it probably makes the consumer think twice about spending.
January 17, 2020
VAT is the preferred tax by the Eu, one tenth of the VAT take is for the EU, Upon Brexit can we expect VAT to drop from 20 % to 18% “at a stroke”
January 9, 2020
Just heard on the news channels that the āconsumer buying habitsā are changing
They are not
The conditions in which the retail consumer shops on the high street or retail park have become difficult in recent years with parking police, empty (or charity, betting) shops and beggars
These conditions are a direct result of local government wishing to raise extra revenue and national government business rate policy
January 9, 2020
My council has just announced that they are putting up car parking changers due to a Ā£30m budget shortfallā¦..indirect result ā less shoppers less shops more closures
January 9, 2020
Fewer! Or less if you really prefer! Vivre la difference!
January 10, 2020
I bet their pensions don’t suffer ?
January 10, 2020
Glen, How many more new homes have your Council built in their area that they are collecting rates from I wonder? Have they had to contribute to build new schools? Were new roads for these estates paid for by the builders or other residents. I wonder how we can all have an extra say 2,000 homes paying at least Ā£1,000 pa more yet there are bigger and bigger shortfalls?
January 9, 2020
Cutting business taxes and taxing online sales is the way forward. It does not take a mathematician to work out that online vendors have a massive advantage over the high street.
January 9, 2020
I suspect a lot of people stockpiled in preparation for Brexit and that has affected the figures too.
January 10, 2020
rose – -we didn’t buy extra televisions, washing machines, kettles, clothes, toiletries, furniture, groceries etc – did you?
January 9, 2020
He is no longer controlled by the UK Establishment. He now has new global masters at the UN preaching their new unethical narrative/dialogue.
(By the way, some entity definitely controls the postings on this site as
they do not like truthful comment)
January 9, 2020
Poor retail sales – good news for the environment considering our massive population. A population of 5-10 million would help all round.
January 9, 2020
The question that has to be asked is which foreign countries, the EU particularly, that sell us loads of stuff, are prepared to continue getting paid in Pounds Sterling; and, have enough faith in Sterling’s holding value, to continue saving Pounds and not selling them in exchange for Dollars, Euro or Yen; which would force down the Pounds exchange value.
The UK has a large Current Account (CA) deficit. The natural process to correct that would be for the exchange value of the Pound to be forced down to increase export competitiveness and reduce imports, so reducing the CA deficit.
Central Banks in the currency areas associated with the foreigners who are selling us loads of stuff, have the unlimited capacity to buy Sterling, raising its exchange value so the Brits can continue to keep buying their stuff and keeping those foreigners own employees in work.
January 9, 2020
On hearing more of around up of the retail news, it would be right to suggest it is the high street that is suffering, not retail sales. In part the high street is because local councils deter.
Specifically M&S and John Lewis. Any ony who has been in those shops of late will understand why. Yet other retailers are actually up. Online is up, not a surprise because of the UK tax disparity – it is not a level playing field
January 10, 2020
Reasons for poor retail sales are various. Internet shopping of course. 90% of my clothes are bought online. I for one, look in the local charity shops for stuff. I have bought a variety of items, glasses, mugs, a golf bag and toys for our grandson – all secondhand and in good condition. This is an example of useful recycling. I for one, shan’t mourn the passing of some of our shops. They could be converted for other uses such as emergency housing.
January 10, 2020
We also need retailers to offer desirable, realistically priced products.
I have been looking for a replacement jumper for two years but, due to retailers’ obsession with tight fitting clothes for men, have not purchased anything. M&S reported yesterday that they were over stocked on such slim fit items and I have a slimmed down wardrobe.
Similarly there was a report that Christmas pud sales were down. Unsurprising when Sainsburys continues to offer Ā£8 puddings but Lidl sells one for Ā£3. Of course the value of sales will drop as consumers take advantage of choice.
January 10, 2020
I wonder how places like Bicester Village and Cheshire Oaks are doing turnover wise in comparison with previous years? People I know just want better retail experiences with free parking, nice surroundings, security, clean free toilets, and places to eat and drink.