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Rain dampens outlook for retailers

Shoppers in Manchester
Getty Images

After Sunday's news that greetings card firm Clintons is considering shop closures and rent cuts as part of a survival plan, there is more bad news for the UK's beleaguered High Streets today.

The latest footfall survey of the number of shoppers heading to stores showed a 3.2% year-on-year fall in October, with the wet weather a factor.

“High Streets were hit hardest in October, with the wet and wintery weather putting off many consumers from venturing out to the shops," said Helen Dickinson, chief executive of the British Retail Consortium (BRC).

"Weak consumer demand and Brexit uncertainty have both impacted sales in recent months, and this could be further affected by the imminent election campaigning."

The 3.2% decline was steeper than September and both the three-month and 12-month averages, the BRC-Springboard survey found.

On the High Street, footfall saw a far steeper rate of decline than in September, at 4.9%.

'Consumers resilient, business investment weak'

Shoppers
PA Media

Analysis of the third-quarter growth data reveals "the recent familiar story of resilient consumers but business investment weak," says Howard Archer, chief economic adviser to the EY Item Club.

"The only consolation on the business investment front was that it was flat rather than contracting again.

"Stocks were run down markedly in the third quarter but there was a strong positive contribution from net trade – although the strong rise in exports looks rather surprising.

“Specifically, consumer spending rose 0.4% quarter-on-quarter in the third quarter. Consumers continued to benefit in the third quarter from improved real earnings growth although employment growth slowed."

For 2019 as a whole Mr Archer expects GDP growth of just 1.3%, "which would be the weakest performance since 2009 and down from 1.4% growth in 2018".

"The economy looks to have little momentum going into the fourth quarter amid a myriad of uncertainties (Brexit, domestic political, global economic).

"Growth is seen slowing further to an 11-year low of just 1.0% in 2020. This forecast is based on the assumption that the UK ultimately leaves the EU in the first quarter of 2020 with a 'deal'."