The Inside Edge
An article in the FT today claims consumer confidence is returning after a 5.9% climb in retail sales in October against the same month last year. The ‘surge’ was apparantly helped by Halloween and school holidays (didn’t they occur last year as well?).
Some of the consumer confidence has been put down to the ‘unanticipated strength’ of the housing market – the RICs reported rising sales again in October and that some London properties have regained 2007 levels on the back of a weak pound attracting foreign investment and the hope of city bonuses.
It’s important to remember the media’s role in amplifying any trend in the economy – if they tell us we’re heading into a recession steeper than the latest ride at alton towers then we all start behaving like it and stop booking holidays and buying new cars – the economy shrinks and we fulfill the prophecy. Therefore it’s good to read positive reports such as this in the press – but serious investors will balance this with the underlying opinion of many commentators that the trough in property prices will only be found where it represents value vs earnings and that -20pc wasn’t it.
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