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Last Updated: Tuesday, 1 March, 2005, 15:41 GMT
UK retail sales edge up slightly
Consumers remain cautious
UK retail sales inched up in February, but at a slower rate than analysts had forecast, the CBI reports.

The business body said 30% of firms reported sales volumes up on a year ago, while 28% said they were down.

The balance of + 2 was well below forecasts of + 10, but showed a notable improvement on January's - 3 figure.

And shopkeepers' optimism about business over the next few months has improved, the CBI said, with 33% of firms expecting sales to rise in March.

"Retailers expected a return to modest sales growth in the immediate future, suggesting they believe consumer confidence will hold up," said Ian McCafferty, the CBI's chief economic adviser.

The picture of a tough retail climate is however confirmed by the fact that retailers axed jobs at the fastest rate in 15 years during the last year.

The CBI reported that 33% of retailers were employing fewer people than a year ago, compared with 15% who had taken on more staff. This balance of - 18% was the lowest rate since November 1992.

Cautious shoppers

The latest figures provide more evidence that consumers are tightening their belts.

The CBI said the retail climate had been particularly tough for shops selling big-ticket items following five interest rate increases from the Bank of England since November 2003.

High levels of personal debt, it said, coupled with stagnant house prices have heightened the impact of the rate increases.

"Consumers are also concerned about rising fuel prices and council taxes," said Ian McCafferty.

Moreover, the CBI is now forecasting another quarter point rate hike to 5.0% in May.

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