Tuesday 28 November 2006

UK housing market robust but retailers face gloomy Christmas

Reuters reports that UK house prices are still rising.

Property consultant Hometrack said prices rose 5.3 percent in November compared with a year ago, up from 4.9 percent in October. On the month, prices were 0.6 percent higher, although the monthly figures are not seasonally adjusted.

As are mortgage approvals.

Mortgage approvals rose 3.7 percent in October from a year ago, the British Bankers' Association said on Monday, in a further sign rising interest rates have not yet dented the property market.

But UK retailers remain as gloomy as ever.

Seymour Pierce's Richard Ratner, who has followed the sector for 25 years, said his data showed sales for the bulk of the UK rag trade were down 10 to 20 percent in the past two weeks, with Debenhams and Next looking among the weakest.

"We now believe that Christmas in 2006 will be worse than 2005 and could be as difficult as or even softer than 2004, which was the worst Christmas for 23 years. If the latter is the case, it will make it the worst for 25 years," Ratner wrote.

Ratner's gloomy forecast comes after several bellwether British non-food merchants reported low-key sales and warned of the effects of two quarter-point interest rate hikes this year, soaring energy bills and rising unemployment.

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