Weekly Economic Analysis by Lloyds TSB

There appears to be a growing view, most evident in equity markets, that the worst of the recession may be behind us. Behind this perception has been a run of better than expected economic data, in the UK and elsewhere.

Can UK retail sales stay positive through the recession?

There appears to be a growing view, most evident in equity markets, that the worst of the recession may be behind us. Behind this perception has been a run of better than expected economic data, in the UK and elsewhere. Unfortunately, the majority of the economic figures released are still consistent with declining output, just at a decelerating pace.

But there is one aspect of the UK recession that is noticeable: the remarkable resilience so far of volume retail sales relative to what has been happening to manufacturing output. In the year to February, manufacturing output dropped to a level that was 13.8% below that in the same period of 2008. By contrast, the volume of retail sales in the year to March 2009 was 1.5% higher than in the corresponding month of a year ago

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