20.06.08 by Matthew Lowndes

Strawberries and cream

A shock spike in retail sales during May — they jumped by 3.5% — has triggered renewed fears about interest rate rises, which would hit consumers and borrowers even harder just when they least need it. But I don't think this will be the case.

The spike was triggered, above all, by that glorious, sun-drenched week or two at the beginning of May when we all went out and bought Webers, charcoal and rib-eye steaks — and a couple of bits of new summer clothing (after all, the last time we had a summer was back in 2006 if I remember correctly).

Many predict that spending in June and July will fall back in line with March and April, i.e. be a lot lower, and that this spike was just a one-off. General weakened demand, fuelled by soaring petrol, utility and food prices will in itself be a natural pull-back on inflation, hopefully obviating the need for a rate rise.

But amidst all the uncertainty, there is at least one reason to smile — at Wimbers next week we won't have to watch Tiger Tim's clenched fist action!

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