STOCK MARKET WATCH, Thursday, December 15, 2011

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25. Retail Sales in U.K. Drop More-Than-Forecast 0.4% as Recession Risk Grows

http://www.bloomberg.com/news/2011-12-15/u-k-retail-sales-fall-more-than-forecast-as-outlook-darkens-1-.html

U.K. retail sales fell more than economists forecast in November as cash-strapped households shunned a second month of price discounts and chose to save rather than spend amid warnings of a looming recession.

Sales including fuel fell 0.4 percent from October, the Office for National Statistics said today in London. The median forecast of 23 economists in a Bloomberg survey was for a 0.3 percent decline. Excluding auto fuel, retail sales fell 0.7 percent on the month.

The figures underline the pressure being felt by consumers as wages fail to keep pace with inflation and concern mounts that the economy is following the crisis-stricken euro region into recession. Unemployment hit a 17-year high of 2.64 million in the three months through October and is forecast to rise further next year.

“All in all, the picture for U.K. household consumption is not very encouraging,” said Annalisa Piazza, an economist at Newedge Group in London. “The labor market is extremely weak. Average earnings run at less than half the speed of inflation and consumer confidence hit record-low levels. We expect fourth- quarter household consumption to be a drag for GDP growth.”