Shopper’s big spending spree in May

Retail sales jumped by a whopping 3.5% from April – the biggest rise for more than 20 years.

Experts believe it is due to the long awaited warm weather which finally arrived. It was the hottest May since records began and saw sales in beachwear, barbeques and garden furniture soar.
Summer t-shirts, dresses and sandals were big sellers. Computer games and consoles, especially Wii Sports shot of the shelves. IPods and flat screen TV’s were also big sellers.

Statisticians were very surprised by the results and had to double check their findings. Economists were said to be staggered by the reports as this surge in spending what not as the market expected.

Food was up by 3.3%, clothes by 9.2% and household goods by 2.6%.

However the Government has stressed this is not the start of the retail recovery. With inflation on the increase and house prices on the fall there will be less for consumers to spend and we will all have to tighten our belts.

Retail spending down again as house prices plummet at record speed

If you’re starting to think the economy couldn’t get any worse I have some bad news for you, it is getting worse every day. For the second month in a row, retail spending is down and house prices across the country dropped at a rate greater than at any other time in the last 30 years.

The Royal Institute of Chartered Surveyors (RICS) has warned of further drops in house prices claiming the shortage of houses on the market is slowing down the drop in house prices. If the economy problems cause people to sell their homes out of necessity, much larger drops would be probable. A reduction of 10% in house prices by the end of the year is not unlikely.

Will a cut in interest rates help lesser then impact of this so called global credit crunch? Most economists believe the Bank of England will cut rates next month. I guess we can only sit tight and wait and see.

Reports: The Guardian, The Independent, Reuters