P.M. BRIEFING : Britons’ Spree Pressures Economy
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LONDON — British consumers, taking advantage of an unusually warm May, went on a shopping spree that added to inflationary pressures and raised concerns that further rises in interest rates may be needed to cool the economy.
The government reported today that seasonally adjusted retail sales jumped by 2.5% in May--three times the rise economists had predicted--after a 1.4% decline in April.
“This is much stronger than expected and will increase the upward pressure on U.K. interest rates,” said an economist with Midland Bank.
Stocks eased in London and money market interest rates climbed as investors were disappointed that the government’s strategy of using high interest rates to brake inflation has not yet succeeded.
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