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Thursday, April 23, 2009

BOE- "Agents’ summary of business conditions."

More bad news for the UK economy. Earlier this week we saw the Consumer Spending and "Trends" analysis. This was just, to me, a follow up on what we already know!
• Consumer spending had remained weak, but there were some further reports that the rate of contraction
of retail sales had eased.

• There had been a further pickup in housing market activity — albeit from a very low base.

• Investment intentions remained weak.

• Export volumes had shrunk further, as the slowdown in global demand outweighed any gains to
competitiveness arising from sterling’s depreciation. Imports had continued to contract sharply.

• Destocking had continued throughout the first quarter.

• There was little change to the picture of sharply contracting output across the manufacturing,
construction and services sectors.

• Credit conditions had continued to be a major concern for many firms, with no signs of easing in recent
months.

• Labour demand had continued to shrink. While many firms had made further cuts to average hours,
headcount had also contracted. Cuts in average hours, lower bonuses and low pay settlements had left
per capita labour costs lower than a year earlier.

• On average, there had been little change in the rate of inflation in materials prices. Inflation in output
prices had slowed further as weak demand conditions had continued to press down on suppliers’ margins.

• Consumer goods prices: promotional activity had continued to push against the impact of rising import
prices, and of increases in the prices of some products to pricing points seen before the VAT cut.
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