After a dismal December, retail sales rally in January – but plummet again as “consumer caution” restrains customers.
According to the British Retail Consortium (BRC), January sales and a rush to beat the VAT hike on January 4 saw retail sales rise by 2.3 per cent – the biggest increase since March 2010.
But retail sales then eased later in the month, as “consumer caution” took hold. Stephen Robertson, director-general of the BRC said the gradual slowdown in sales occurred as the “reality of worries about jobs and personal finances returned to customers' minds”.
Robertson echoed many economists’ warnings that, in the midst of consumer uncertainty and declining demand, government cuts could choke recovery: "Turning round consumer confidence is central to turning round the economy. A range of pressures is bearing down on customers. As it considers the Budget, the government must not add any more."
Pressure is mounting on Chancellor George Osborne, as economists and business owners call for him to rethink the severity of his planned cuts.
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