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Last Updated:  Thursday, 20 March, 2003, 10:52 GMT
High Street spending dips again
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UK shoppers are becoming increasingly reluctant to spend according to the latest official figures.

They showed that February's retail sales were 0.1% lower than in January, the second month in a row that sales have fallen.

The figures from the Office for National Statistics (ONS) also showed the annual rate of retail sales growth had dropped to 3.2% - the lowest level since July 1999.

The ONS said sales were weak across all categories of goods.

"It's disappointing that retail sales fell on the month and confirms a picture of slowing consumer demand," said Philip Shaw, chief economist at Investec.

"But how much of this is due to war tension and how much to the fundamental picture is difficult to judge."

Focus on the consumer

The figures are likely to raise concerns about the strength of consumer spending, which accounts for around two thirds of the economy.

The consumer boom of recent years has helped to offset weaknesses elsewhere in the economy such as the manufacturing sector, which remains mired in gloom.

Further doubts over the mood of consumers were raised by the latest housing survey from the Royal Institution of Chartered Surveyors (RICS) which showed prices falling for the first time in two years.

"Coming so soon after the RICS survey, (the retail sales figures are) going to put an increased focus on what is happening to the consumer," said Alan Castle at Lehman Brothers.

"It raises the risk of an even sharper consumer slowdown."

Last year retail sales fell for two months in a row in May and June after the Queen's Golden Jubilee celebrations hit sales.

Before that, the last time sales fell two months running was in September and October 1998.


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