Slowdown in spending spree

By THIS IS MONEY
Updated:

 

THE HIGH Street boom stuttered in May, with sales growing at their slowest in seven months, latest CBI figures show. Timed to influence the Bank of England's decision on interest rates, the CBI also said weaker demand and growing competition had cut price rises to their slowest rate in 15 months.

'All the evidence in today's survey points to a gradual slowdown in consumer spending,' said Alastair Eperon, chairman of the CBI's survey. 'There is no necessity for the Bank of England to increase interest rates (on Thursday).'

The CBI said 49% of firms said sales were up on the previous year, while 24 said they were down. DIY and footwear sales were hardest hit. That brought a positive balance of 25% - less than half April's level. The April figure, a 14-year high at 57%, was buoyed by a bumper Easter and good weather.

The low cost of borrowing has been blamed for fuelling a spending boom with both retail sales and the housing market buoyant in recent months. The Bank of England's Monetary Policy Committee has started a two-day meeting to decide whether to leave interest rates at a 38-year low of 4%.

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