Question: State of the Economy?

LCS asks in a comment attached to the blog of Jan. 20 if retail sales are being affected by current economic slowdown. Without question, the UK is experiencing a meltdown of sorts. Unemployment has topped out at the highest level in more than a decade, the pound is falling sharply relative to the dollar and the euro, foreclosures are about three times ahead of last year and that giant sucking sound you hear is failing banks draining money from HM Treasury to prop them up. Notwithstanding that, however, we see little evidence of economic slowdown. The last official figures available suggest that total retail sales rose last quarter 1.7 percent while inflation was around 1 percent. That's slower than the business community might like, but at least they're still in postive territory. Our observations would confirm that. Queues (lines) are long at the grocery stores, sales are brisk in clothing stores, there are few "for let" signs in the shopping areas, new restaurants are opening, new retail space is being developed and the tourist attractions are doing brisk business. As Americans abroad, the pound's precipitous fall against the dollars, sliding to $1.388 this morning, has a big benefit of making our dollars stretch a lot farther, so let's hope the recovery holds off until at least April!