London retail sales plunged in aftermath of bombings
Tuesday, 16 August 2005
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Retail sales plummeted in London after the July bombings, while business confidence across Britain hit a two-year low last month, according to surveys out yesterday.
The London Retail Consortium (LRC) said shop sales fell 8.9 per cent in July from the same month last year - the steepest annual fall since the survey began in October 2002. Shoppers stayed away from stores in the capital after 7 July when four suicide bombers set off bombs on three London Underground trains and a bus, killing more than 50 people. Confidence was severely shaken when another series of attacks followed exactly two weeks later, even though this time the bombs failed to explode.
The LRC said the bombings hit trade in London hard on 7 and 21 July. The number of people using the Tube dropped sharply in the aftermath of the attacks. Sales have recovered a little since then but continue to be affected by anxiety among consumers, disruption to Underground services and numerous security alerts. The sharp drop in central London for like-for-like sales compares with a smaller fall of 1.9 per cent for Britain as a whole.
A separate survey from Lloyds TSB showed business confidence across the country fell to the lowest level since the start of the Iraq war in March 2003.
Shop sales in London fell 0.4 per cent in the three months to July. Kevin Hawkins, the LRC's director, said: "It should be remembered that the June sales continued well into July and there was a spell of good weather in the middle of the month. Taking these factors into account, the decline in sales is very serious, compounded by the 60 per cent increase in the congestion charge which retailers need like a hole in the head."
He added: "The question now is whether some consumers will continue to stay away from central London and whether tourists will be deterred by the threat of further disruption."
The terror attacks had no impact on the housing market, which is showing signs of revival, according to the Royal Institution of Chartered Surveyors (Rics). Its monthly survey showed that prices continued to fall in the UK in July, but at the slowest rate in five months. The number of surveyors reporting price falls fell to 36 per cent from 42 per cent in June. Scotland and north-west England saw the first price increases in almost a year.
Sales were down 18 per cent compared with last year, but up from February when they fell 36 per cent.
Jeremy Leaf, at Rics, said: "Some signs of recovery are evident in the market. Would-be buyers have are more confident as a result of the interest rate outlook, while the economy continues to deliver steady growth."
The Bank of England cut interest rates this month for the first time in two years.
