What a difference a week makes. Last week there were all kinds of signs that the UK could be coming back from the depths and stage a recovery even faster than the rest of Europe. Alas, now BOE governor Mervyn King is talking about a “protracted” recession.
Of course, from the beginning everyone assumed the downturn would be exceptionally long. It was only recently that chatter began of a surprise, early recovery.
The bad news: retail sales, which had been trending higher actually turned down last month.
Bloomberg: U.K. retail sales unexpectedly dropped in May for the first time in three months as rising unemployment dissuaded shoppers from buying clothes and shoes.
Sales fell 0.6 per cent from April, the Office for National Statistics said today in London. Economists predicted a 0.3 per cent increase, the median of 28 forecasts in a Bloomberg News survey shows. Sales dropped 1.6 per cent from a year earlier.
On the year, the value of sales dropped 1.1 per cent, the most since records began in 1988. The annual data are affected by “unusually large” estimates of retail sales a year earlier in May 2008, officials said.
Of course, this comes amid the backdrop of a rising market, a rebound in housing, a healing (or so it would seem) financial system and a strengthening pound.
All that being said, unemployment is at a 12-year high, and white collar workers are applying in droves for work at McDonald’s, according to the Daily Mail. No wonder on-the-ground feelings aren’t matching up to the market’s frothy expectations.