Finance Matters

Posts Tagged ‘Office for National Statistics’

The Office for National Statistics (ONS) has today revealed UK retail sales beat forecasts in September, led by spending on electrical goods such as laptop computers.

According to the Statistics Office, sales rose by 0.6% last month, reversing the 0.4% fall in August.

Furthermore, the figure was 0.6% higher on an annual basis.

Retail sales have been struggling over recent times as households continue to be squeezed by higher inflation, rising unemployment and sluggish wage growth.

As a result, conditions are expected to remain challenging for retailers in the medium term.

Last week, the ONS revealed UK unemployment rose to a 17-year high in the three months to August, while earlier this week, it revealed that inflation surged to 5.2% in September, from 4.5% in August.

These pressures are making consumers cautious about spending, according to analysts.

In order to stimulate the economy and aid the recovery, the Bank of England last week announced it would embark on a fresh round of quantitative easing (QE).

There have been fears that the UK could enter a double-dip recession after a recent series of bad news from the economy and the ongoing debt crisis in the euro zone and the majority of economists expected the central bank to introduce a further round of QE.

However, while the Bank hopes the QE scheme will revive the sluggish economy, leading think tank, the Ernst & Young Item Club, warned earlier this week that the QE measures are unlikely to boost the recovery.

Its comments came just a week after the British Chambers of Commerce (BCC) said the fresh round of QE may not be enough to prevent the economy from slipping back into recession and “more radical measures” are required.

In other news today, UK consumer confidence rose for the first time in four months in September, according to GfK NOP research company.

The Office for National Statistics (ONS) has today revealed UK public sector net borrowing rose last month.

According to the ONS, public sector net borrowing came in at a higher than expected £15.9 billion in August – a rise of £1.9 billion from a year ago and represented the highest for the month of August since records began in 1993.

Since the start of the financial year in April, public sector net borrowing totals £52 billion – just 7% less than a year earlier.

Overall, public sector net debt stands at 61.4% of UK GDP (total economic output) – up from 55.3% this time last year.

The Government’s independent Office for Budget Responsibility (OBR) is expecting public sector net borrowing to come in at £122 billion for the current tax year – lower than the £143 billion borrowed in the previous tax year.

However, today’s figures will put further pressure on Chancellor George Osborne’s tough austerity measures but the Treasury maintains that spending plans are on track.

A spokesperson for the Treasury said: “These are challenging times, but despite economic growth being lower than the OBR’s forecast earlier this year, tax receipts have continued to grow and spending so far this year has grown at the rate the OBR forecast in the Budget.

“These figures also include a welcome and substantial downward revision to borrowing so far this year and to overall borrowing last year.”

The OBR estimates that the UK economy will grow by an optimistic 1.7% this year – however, this estimate was made in March and is widely considered out of date.

Yesterday, the International Monetary Fund (IMF) said the global economy has entered a “dangerous new phase” and slashed its growth forecast for the UK.

In its World Economic Outlook bi-annual report, the IMF said the UK economy will grow by 1.1% in 2011 compared with its last forecast of 1.7% in April.

The Office for National Statistics (ONS) has today revealed UK retail sales fell by 0.2% in August after riots earlier in the month affected trade.

The fall followed slower growth in the previous two months after sales rose just 0.2% in July and 0.8% in June.

In the meantime, food sales were also down – an area which has not particularly suffered as consumers rein in their spending.

However, it appears consumers are being cautious after food sales noted a 0.3% fall in August compared with growth of 0.7% in July.

Households continue to be squeezed by higher inflation, rising unemployment and sluggish wage growth.

The ONS revealed earlier this week that inflation rose further in August, to 4.5% on an annual basis.

Consumer spending is a key driver of economic growth and as a result of today’s figures, a further slowdown is anticipated for the third quarter.

Several retailers have recently reported tough trading conditions. Today, Kesa, the parent company of electrical retailer Comet, revealed a sharp fall in sales.

Total revenue in the previous three months fell by 9.8% on a like-for-like basis while sales slumped almost 22% after Kesa blamed weak trading.

However, the company said the fall was expected and compares with strong sales in 2010 due to the football World Cup and the popular launch of Apple’s iPad.

Yesterday, the John Lewis Partnership, which is regarded as a barometer of British retailing, has reported a marginal increase in sales and said trading conditions are “extremely challenging”.

The renowned employee-owned chain, which owns the Waitrose supermarket chain, said sales rose 1% on a like-for-like basis in the six month period to 30 July.

However, across the group, first-half pre-tax profits slumped by 18% to £90.4 million.

In addition, last week, Home Retail Group announced a drop in sales at both its Argos and Homebase chains, while electrical goods chain Dixons Retail posted a fall in sales.

Accountancy firm BDO recently warned Britain’s retailers should prepare themselves for some tough times as pressure builds on consumers in the run-up to Christmas.

However, there was some good news today after Kingfisher, the owner of DIY chain B&Q, announced plans to create more than 1,200 new jobs through a major expansion of its trade supply arm, Screwfix.

The Office for National Statistics (ONS) has today revealed UK unemployment rose sharply in the three months to July – the biggest rise in almost two years.

The ONS said unemployment rose by 80,000 in the three month period to 2.51 million – far higher than the 70,000 expected by economists.

The latest figures take the unemployment rate to 7.9% – however, this was in line with forecasts.

In comparison, unemployment in the US stands at 9.1%, Japan’s unemployment rate is 4.7%, while in the euro zone, it is 10%.

Youth unemployment also grew sharply, by 78,000 to 973,000.

Meanwhile, the number of Britons claiming jobseeker’s allowance (JSA) rose for the fourth consecutive month in August, by 20,300, to 1.58 million – however, this was slightly less than forecasts.

Average earnings, meanwhile, rose by 2.8% between May and July, up by 0.1% over the previous month, with weekly wages now averaging £464.

The number of people in employment in the economy fell by 69,000 in the three month period to 29.17 million – the biggest drop since March 2010, according to the ONS.

Furthermore, the public sector workforce fell by 111,000 in the three months to June – the largest fall since records began.

However, an increase in private sector employment of 41,000 partially offset the drop.

Employment Minister Chris Grayling described them an “unwelcome set of figures”.

The figures suggest the labour market is coming under immense pressure from public spending cuts.

The spending cuts have been described as the biggest for decades; however, Chancellor George Osborne has deemed them necessary in order to bring the budget deficit down.

Some experts have even suggested they could push the economy back into recession.

The Office for National Statistics (ONS) today announced Consumer Price Inflation (CPI) rose to annual rate of 4.5% last month from July’s rate of 4.4%.

However, the figure was in line with analysts’ expectations.

Higher inflation continues to be led by rising food costs but the main reason behind last month’s rise was a 5.1% annual increase in the housing, water, electricity and gas component – which rose the most in more than two years.

Utility companies recently hiked their prices – some by almost 20%.

However, clothing and footwear was also a contributor to higher inflation last month.

UK inflation continues to remain more than double the target of 2% and has been above this level since December 2009 and is expected to remain above target during 2012.

The Bank of England has previously warned that inflation could reach 5% later this year, driven higher by rising energy and food costs but should return to target by 2013.

Meanwhile, Retail Price Inflation (RPI), which includes mortgage costs and is used as the basis for many wage deals, rose to 5.2% in August from 5% in July.

Inflationary pressures are rife throughout the world, particularly in Asia, and many central banks have opted to lift interest rates to combat stubbornly high inflation.

However, the Bank of England last week opted to keep rates at the historic low of 0.5%, suggesting it is reluctant at this stage to lift interest rates as it could be harmful to the economic recovery.

Last month, policymakers Martin Weale and Spencer Dale dropped their call for higher interest rates and joined their fellow Committee members by opting to keep rates low to stimulate the recovery.

The economy appears to be stuttering at present and many experts believe the central bank may re-introduce the quantitative easing (QE) programme – designed to stimulate growth within the economy.

In other news today, the ONS reported that the UK goods trade deficit unexpectedly widened in July.