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Spend, spend, spend

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Despite austerity, high street sales are up—by volume and by value, an ONS report shows

The standard analysis of the outlook for the UK economy over the next few years incorporates a view that growth will disappoint, in part, because consumer spending will be weak. Consumers will retrench, so the argument goes, because they have taken on too much debt in the past and are now seeking to pay it off.

But the latest retail sales data, published today by the Office for National Statistics, do not show any signs of consumer retrenchment. Quite the opposite, with retail sales volumes up 0.9 per cent in January after a 0.6 per cent increase in December.

What is most noteworthy, though, is not sales volumes over the last couple of months, but sales values over the last three years.

Taking the latest three months (to smooth out month-to-month fluctuations), sales values

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  1. February 18, 2012

    Rob Slack

    Retail sales may give a boost to reported GDP but do they contribute so much to real value?

    “Shopping as a hobby”/”Retail therapy” seems to me to be a way to waste economic resources whilst producing no real value but boosting GDP, which is a poor measure of wellbeing.

    Philip Green, talking about recent retail sales on TV yesterday, said (something like) “now we have got rid of the stuff we needed to get rid of we can start selling the new seasons goods”. Is that really good for us? Perhaps we need a slogan “Fashion is Waste” (as well as “Advertisers are Mercenary Lairs”).

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Tony Dolphin is chief economist at IPPR 

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