Additional cracks are starting to appear in the global economy. In the UK, retail sales plunged the most in eight years. Consumers also becoming worried about falling house prices. I propose consumers should have been worried home prices did not tank long ago.
Bloomberg notes that U.K. Retail Sales Plunge at Fastest Annual Pace in Eight Years . The story caught my eye and was not unexpected.
The Confederation of British Industry said its measure of sales plunged to minus 36 in October — the lowest since March 2009 — from a positive 42 in September.
Faster inflation has put the squeeze on shoppers this year, and a separate report on Thursday suggests a cooling housing market could further dampen consumers’ enthusiasm for spending. YouGov and the Centre for Economics and Business Research said while their headline sentiment measure rose this month, confidence in the housing market weakened.
“The downtick in the house value measures is a concern,” said Nina Skero, head of macroeconomics at the CEBR. “One’s perception of own home value has direct implications on their future willingness to spend.”
How Economic Illiterates Think
Nina Skero, head of macroeconomics at the CEBR, provides perfect example of economic illiteracy. The concern should not be that home prices are falling in the UK. The concern should be they got as high as they did in the first place.
