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A controversy emerged yesterday over the true state of high street sales as the City joined retailers to attack official figures that indicated a shopping bonanza since the new year.
Economists sounded warnings that the Bank of England would be left puzzled and crucial decisions over interest rates hampered by the official data, which showed a buoyant 2 per cent jump in the volume of goods sold in the first quarter.
This marked the strongest sales growth for four years.
The steep jump in first-quarter sales, up 5.6 per cent from a year earlier, was sharply at odds with almost every other barometer of retail activity, and retailers’ own reports that trading is blighted by the credit squeeze and house price slump.
The sharp increase in sales during the January to March period came despite the official data registering a modest 0.4 per cent drop in March alone.
Sales of nonfood items dropped by 0.7 per cent in March, but already strong estimates for January and February were revised to still higher levels.
City economists lined up with the British Retail Consortium, and senior retailers to question the figures from the Office for National Statistics.
The ONS itself insisted that “underlying growth in retail sales remains robust”.
Economists highlighted a series of other gauges of consumer demand, all of which painted a much bleaker picture.
They included the Bank of England’s own surveys by its regional agents, which detected weakening consumer spending.
Other indications of sharply deteriorating consumer conditions included plunging consumer confidence, households’ willingness to make big purchases at a 13-year low, and grim monthly snapshots of the high street by the BRC and CBI.
Stephen Lewis, of Insinger de Beaufort, said it was clear that the Bank’s monetary policy committee (MPC) did not believe the earlier official figures, with minutes of its debate this month noting the contrast between these and other indicators.
However, Mr Lewis said that the MPC would now be left in a quandary over what data to believe.
Analysts pointed to the true scale of the boost to sales volumes from aggressive discounting, as well as complicated adjustments to strip out from the data seasonal trends in trading around Easter, as hard-to-measure factors that may have distorted the figures.
The official estimates confirmed other evidence that retailers have resorted to aggressive discounting to entice consumers.
Goods prices were down by 1.2 per cent in March from levels a year before – double the year-on-year fall reported for February, the ONS estimated.
However, price trends were still stronger in the first quarter than in the final quarter of last year.
Economists said that the official numbers may have been unduly flattered by the difficult process of seasonal adjustment, which is notoriously difficult around Easter.
The ONS figures were also met with disbelief by top retailers, who maintain trading conditions are grim. Sir Philip Green, owner of Arcadia retail group, said: “Do they start off by saying ‘Once upon a time . . .’?”
Chris Ronnie, chief executive of JJB Sports, added: “The environment is the most challenging I’ve ever known.”
At the launch of its autumn range on Wednesday, New Look said the clothing market had been far worse than expected over the past two months.
Joscelyne Hynard, a British Retail Consortium senior analyst, called for the ONS to clarify how it collated the figures as the trade body attacked them for “disguising” the true state of the high street, where nearly a dozen chains have fallen into administration since the start of the year.
She toldThe Times: “When I look at their numbers, I don’t really believe them. The retailers are telling us it’s dire out there, especially the nonfood ones. Clarification would be helpful. Our figures are based on actual data from our participants, we don’t revise, we don’t seasonally adjust, it’s a straightforward calculation.”
However, not all retail executives agreed. One argued: “The high street’s proving more resilient than people thought.”
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Its quite a simple scam really.
1. inflate the money supply, lending money created out of fresh air (not backed by gold and silver) to anyone, to buy goods, homes, cars etc .
Then crash the system and repossess everything bought with nothing.
Who-ever prints the money eventually owns everything.
Andrew Snowden, Skipton, England
Looks like they're not facing facts and are looking for lower interest rates.Hang on a minute,won't that put up inflation and hence, people spend less.No sane person would think that the BOE should cut rates on 7 th May do they?
Stephen Hulton, eure, france
Petrol prices are high, car parking charges are exorbitant - why drive to the shops when you can shop over the internet? But of course the High Street retailers miss this and they have huge rents to pay and whinge over
Richard, Newton Abbot,
Lies, damned lies, statistics...and government statistics! Brown continues his treasury habit of revealing half truths to hide hide his failings. The truth? Inflation is 5%+, mortgage rates 6%+ and total debt is starting to hurt. Brown's prudence is revealed as a run of good luck that just ran out.
Stephen Bell, Cambridge, UK
C'mon they are raking it in with food prices rising by a few per cent every month. Don't say that they are begging for another rate cut please, inflation is out of control already.
Paul, Coventry,
Can I suggest that they get their calculators checked. Perhaps they should stop using the ones with rose-tinted displays.
Kevin Herbert, Greater Manchester, UK
To what extent is dissatisfaction with the ONS' performance simply dissatisfaction with and mistrust of statistics in general? Is the layperson member of the public or media wag fit to comment...?
Ben P., Robertsbidge, UK
This country becomes more like a banana republic by the month.The baloney figures published by the ONS just goes to show the depth of the manipulation happening in all areas..including the phoney unemployment figures.
Its an absolute disgrace.
antony Graham, southport, England
Interesting isnt it how these retailers choose to ridicule unreliable ONS data yet have been quite happy to quote the ONS's even more fanciful "lower inflation" figures when it suits them (eg in calls for lower interest rates). The ONS has forfeited all public trust and needs a massive shake-up.
Peter Baker , fareham , UK
The ONS is a government department. When did anyone, ever, believe government figures about anything? No seriously, never mind the weary cynicism of Have Your Say smart-alecs like me, ask yourself seriously 'Do you believe anything the government (or indeed the opposition) say?' Worrying isn't it?
eric campbell, harrogate, uk
March was far worse than currently being reported. The previous March did not include Easter which traditionally provides a boost. If sales were so bad with an Easter boost then Aprils figures are going to be truly dreadful due to last April including Easter figures.
Paul Davis, York, uk
They're Government figures, your not supposed to believe them !!!!!!!!!
Peter Fordham, Pego, Spain
It is quite obvious that the ONS is the new, government sponsored 'independent' manufacturer of statistics.It will employ thousands but only a select few will have access to the data they produce-Healthy economy? Pubs are not closing? Crime is Down? Orwell called it "The Ministry Of Information" !!
winstonian, Darlington, UK
Government CPI/CPIX has been a lie for years.
True inflation has been running higher than official figures for years. Thus downward adjustments from nominal growth to real growth have been under-estimated.
Now that inflation is running so high it's just more difficult to get away with the lie
Derek, Cape Town, South Africa
I was in M&S yesterday and I have never seen it so busy! These people were not just browsing, purses were open and the cash tills were ringing.
I was surprised by this but I have come to the conclusion that a high proportion of the UK is addicted to shopping and will purchase at any cost.
Caroline, London,
Perpetuation of the myth. That's what the data has always been about, if others are spending, you spend! It's a bit like this "equivalent" inflation pricing; you eat steak, the price goes up to they compare the price of steak again the price of hamburgers! The numbers aren't designed to look bad.
Jim, London, UK
The low key comments made at the time of the previous release were " surprisingly strong sales at supermarkets boost retail sales".
Try and read into where sales were strong this time round.
Could it really be "surprisingly strong food and petrol inflation boost supermarkets".
harry e, London,
Either the government statistical office is incompetent or spin has now entered into government statistics. I suspect both are at play. Bottom line: trash future government figures and go to other sources.
Ron, Oxford,
Alot of older people were wise enough see a crash coming and took there money out of shares.
Even wiser peolpe took there money out of property.
before it got put else where, lots of wealthy and moderatly wealthy people splashed out a bit on a new mercedes, jaguar etc..
Now it is on deposit
Nicholas Iles, Oswestry, Shropshire
August to November was the first time people could move money out of funds without being penalised, with open market options ie being charged 5% to 15% to move your money out of funds, this was the first free movement since the dot com crash when all that money was lock away.
Spending Spree!
Nicholas Iles, Oswestry, Shropshire
More evidence that you can't trust this government!
Paul, Camberley,