Shop prices in the furniture and flooring sector increased 2.3 per cent month on month in June.
Not a big rise to be sure, with CPI at 4% but this is the Furniture sector. The retail sector facing the biggest slowdown due to the slowdown in the housing market.Mortgage approvals slumped from 58,000 in April to 42,000 in May, a 64 per cent decrease year-on-year. House sales are down 40 per cent year on year.
The problem is furniture, flooring and DIY should be bucking the inflation trend as they slash prices to stimulate sales. They can't because of rising costs, from wage inflation in the
Overall retail prices are staying down quite well, but as we reported before many retailers are selling last years summer stock. The summer sales have some genuine bargains in them.
But once the autumn stock arrives in around 4 weeks time, then retail price inflation overall may begin to rise.
If a retail slowdown occurs then the home economy begins to sink.
I'm with CU on interest rates. Food, Oil and Power costs are creating inflation.
Consumers have to pay those bills, they can't be avoided. That takes disposable income out of the economy. Cutting rates will put some of the money being taken out back into peoples pockets.