UK Retail Spending Surge May Not Save Economy from Recession

According to Alex Kerr from Capital Economics, a slight increase in retail spending may not be enough to save the UK economy from stagnation or worse in the final quarter of the year. In the UK, the 0.2% increase in retail sales in November helped to reverse some of the decline in pre-budget spending experienced in October, providing a slightly better outlook for the crucial December shopping season. However, Kerr argues that a significant jump in spending will be necessary in the last month of the year for retail not to register a decline in the fourth quarter, stating, "The risk of contraction in total GDP remains in the fourth quarter." Capital currently forecasts stagnation in the UK economy for this quarter.