End of 'virtuous circle' as weak retail growth hits UK economy

Growth in the UK economy has slowed and will continue to do so in the short-term. In recent years, the UK has benefited from a 'virtuous circle' in fundamentals as house prices rose, leading to a boom in retail sales. However, this is now poised to vanish with house price inflation at a nine-year low and retail sales growth having slowed to its weakest rate since 1947. The health of the economy is also threatened by a weakening manufacturing sector struggling with higher input costs (oil, electricity, gas, steel) and the ongoing shift in production to low-cost countries. Despite these...