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“Sun Worldwide” analysts are apparently unsurprised by the unexpected fall in UK retail sales in November citing the fact that British consumers are the most indebted in the developed world.
The Office for National Statistics said that sales dropped 0.3 percent on the month after rising 0.6 percent in October against economists’ forecasts of a 0.5% gain.
“The news is a stark reminder of the precarious nature of the UK’s predicament”
The news hit sterling on the foreign exchange market where it fell 0.4% against the US dollar and speculation mounted that the Bank of England may be placed in the position of having to continue its program of quantitative easing should the trend continue into and through the crucial Christmas shopping season.
The UK economy has lost 600,000 jobs since its recession began and the nation remains the only major developed economy still in negative growth after France, Germany, the US, Canada and Japan all emerged from recession in the last two quarters.
“Sun Worldwide” analysts believe that the UK faces a turbulent and difficult 2010 which will be made more uncertain in the run up to the general election in May. Two of the big credit rating agencies, Moody’s and Standard & Poor’s have warned that the UK faces losing its AAA rating if its public finances are not brought under control. Such an event would seriously compromise the country’s ability to attract investors to buy its sovereign debt.
A source close to “Sun Worldwide” suggested that the firm may be considering selling off sterling-denominated stocks if the currency deteriorates further.
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