London (AP) — British economic data provided more conflicting signs Tuesday as leading industry groups reported falling retail sales in May and a rise in buyer inquiries and sales in the housing market.
In its monthly survey, the British Retail Consortium said like-for-like retail sales — those that exclude new stores and space — declined by 0.8 percent in May from the year before, which produced some of 2008’s best growth figures.
The BRC said that food sales slowed after a strong Easter boost in April, while clothing and footwear sales fell below strong sales in the previous year and homeware and furniture sales remained difficult.
Over the three months from March to May, like-for-like sales rose 0.7 percent compared to a year earlier.
“The three-month average is up slightly overall but still well down on the rates regularly seen before the slowdown really hit retail a year ago,” BRC Director General Stephen Robertson said. “The turnaround in sales of big-ticket items such as furniture and large electricals, which would indicate real change in the mood of customers, still eludes us.”
Meanwhile, the Royal Institution of Chartered Surveyors reported an increase in both new buyer inquiries and sales, as well as a reduction in the level of stocks, in May — providing some support for property prices.
The government reported that the average cost of a home rose 1.1 percent in April. That left prices 13 percent below a year ago, according to the Department of Communities and Local Government.
RICS said that 48 percent of surveyors reported a rise rather than a fall, the seventh consecutive monthly gain.
“On the face of it, the housing market does appear to be close to bottoming out with activity picking up in a material way and prices at last stabilizing,” RICS spokesman Ian Perry said. “However it is important to remember that the lack of supply has been as important in underpinning prices as the rise in demand.”
Economists Roger Bootle and Jonathan Loynes at Capital Economics commented that the markets appear to believe that Britain has passed the low point of the recession, pushing equities, bond yields and sterling to six-month highs.
“While the movements seen so far appear justified by the improvement in the economic data, we suspect that it will take more convincing signs that the economy has returned to a path of solid and sustained expansion for equities and bond yields to rise much further. This point could still be some way off,” Bootle and Loynes said in a research note.
A Bank of England official on Tuesday urged banks to pitch in to ensure a sustained recovery.
Near-term indicators have improved slightly and confidence appears to have stabilized, said Paul Tucker, deputy governor for financial stability and a member of the central bank’s rate-setting Monetary Policy Committee.
“But in most countries, including the U.K., bank lending remains subdued,” Tucker said.
Banks have an interest in insuring that businesses get the working capital they need, he said.
“While one can imagine, I suppose, individual banks being tempted to sit it out in order to deleverage their balance sheets in an environment that is obviously tougher for them, there cannot sensibly be free riders.
“If all banks were to adopt such a strategy, recovery might end up being anemic at best, which would feed back into the banking system itself increasing defaults and depleting banks’ capital,” said Tucker, adding that he was “reasonably confident” senior bankers agreed.