Reports on the economy have been so bullish of late that the comments made by retail analyst, Richard Ratner, of Seymour Pierce stockbrokers, came as something of a shock. “We now believe Christmas 2006 will be worse than 2005, and could be as difficult as, or even softer than 2004, which was the worst for 23 years,” he said yesterday.
It caused panic on the markets as shares in many retailers fell yesterday after the broker put out a note, entitled: “Teetering on the brink”, in which it quoted Mr Ratner as saying: “We wonder whether the pressure on the consumer from higher interest rates, levels of debt, council tax bills and other stealth taxes and fuel bills have begun hitting home?”
But its’ not bad for everyone. For the City’s retail guru said: “Some retailers, such as MS and John Lewis, are doing relatively well, as are the foodies.”
With the US economy expected to slow significantly next year, if the Ratner predictions prove prescient, then the UK will be fighting a slowdown on two fronts. It’s difficult to see how the property market will escape too. If retail suffers, you can be certain even more demand will leak out of the market for houses.
The UK will then become even more reliant on the burgeoning recovery in the Eurozone, and for the City to continue its miracle working.
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