Comments: A sense of balance on consumer gloom

Also, if a Russian uber rich brings in 1m and spend that on Ferrari which is imported from Italy, there is a deficit in term of trade. The money brought in would have been seen as capital flow. It is quite difficult to determine exactly what the deficit is.

It is quite interesting that the treasury thinks Britain will continue to attract significant capital inflows from abroad. With the non dom 30k access fee regime came into force next year, some of these capital might decide that Switzerland, Hong Kong or Singapore are better bets.

Posted by Steven at January 13, 2008 05:29 PM

Maybe the answer to the retail slowdown lies in micro-economics. the British consumer is a rational economic being and will refuse to buy in a market where prices have been held up by tradition, greed or simply higher rent seeking by retailers. It is often cheaper for a consumer (i.e. rational) to fly abroad and shop, especially with the depreciated dollar. This will not show up in the trade numbers, but will certainly impact local purchases. This trend has not been measured, but may be significant enough to swing sentiment.
Sentiment, that bellwether of traders, is the only thing that has suffered so far. Everything else is roughly just as bad as it was last year - ballooning debt, low productivity, deficits..
Maybe we are confusing smarter retail choice with a retail slowdown. Let that not start a vicious circle when we can least afford it.

Posted by londonsen at January 15, 2008 09:21 AM
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