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UK shoppers deterred by inflation and security

Tuesday, June 06, 2017 - 01:51

British shoppers kept a tighter grip on their credit cards last month as they felt growing pressure from rising inflation, new figures show just two days before they vote on whether to keep Prime Minister Theresa May in power. Sonia Legg reports.

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Remembering the victims of the latest Islamist attack - the third in as many months. No surprise perhaps that many in Britain aren't in the mood for spending. Official data for the first three months of the year already showed retail volumes fell by their most since 2010. Now two new surveys for May from Barclaycard and the British Retail Consortium point to weakness as Britain prepares for Brexit negotiations. (SOUNDBITE) (English) JAMES HUGHES, CHIEF MARKET ANALYST, GKFX, SAYING: "Inflation is expected to hit 2.8 percent in 2017 and we could see it even higher than that at some point throughout the year. So with prices going up and wages not necessarily moving in the same way that is obviously going to have an effect on the retail sales and how consumers are spending money." There are just two days of election campaigning left And sterling has hit its highest level against the dollar in almost two weeks. It was buoyed by expectations the ruling Conservative party will win relatively comfortably. Investors believe a strong majority for Prime Minister Theresa May will translate into a better deal with the EU. But uncertainly is increasing - some polls have suggested the opposition labour party isn't as far behind as the Conservatives might like. (SOUNDBITE) (English) JAMES HUGHES, CHIEF MARKET ANALYST, GKFX, SAYING: "The fact that they have moved in from where they were, we were expecting a Theresa May landslide victory previously and that just doesn't look like it's going to be the case now. And the closer we get and the closer those polls become, the more nervous the markets get." Security has also become a key election issue with both main parties defending their records. And the latest poll by Survation for ITV also shows how quickly things can change. Last week it gave the Conservatives a six point lead over Labour - now that lead is down to just one point.

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UK shoppers deterred by inflation and security

Tuesday, June 06, 2017 - 01:51