'Curious' rise in retail spending
Jun 23 2008
Rise in retail spending in the light of the credit crunch
The chancellor has called the record rises in retail spending experienced during May 'particularly curious' in the light of the credit crunch.
Speaking on BBC Radio 4's Any Questions, shadow home secretary Dominic Grieve said that many people were facing financial problems, meaning that analysts had expected spending to have reduced during the month.
The 3.5 per cent rise in retail growth, while good for small businesses, was the strongest monthly increase since 1986 and could prompt interest rate rises.
Mr Grieve commented: 'Whether this is a sign that they're suddenly more joyful or a sign that people are being reckless is something we will have to wait two or three months in order to find out.'
Although he did not want to 'talk people into a recession', Mr Grieve said, he advised consumers that they were facing a 'serious economic crisis'.
The Bank of England governor Mervyn King has called the current economic climate the 'most difficult challenge in two decades'.
Credit Crunch Finance Definition
A reduction in the supply of credit that occurs when lenders become reluctant to lend funds and tighten their borrowing requirements. A credit crunch typically drives up interest rates and is often associated with a tightening monetary policy. Source: Yourdirectory.com
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