Next Plc. Chief Executive Officer Simon Wolfson said today that trading conditions are “tough,” after Britain’s second- biggest clothing retailer reported a 15 percent drop in full- year profit. Bank of England Governor Mervyn King said this week that the U.K. economy probably shrank further at the start of this year after the biggest contraction in almost three decades. ..British consumers are “trimming expenditure on the High Street,” said David Tinsley, an economist at National Australia Bank in London and a former Bank of England official. “As the year goes on and the labor market deteriorates, we’d expect that to continue.” ..
“The pound dropped as much as 0.4 percent against the dollar after the release of the data, and traded at $1.4554 as of 10:38 a.m. in London. Sales fell on the month in all categories of stores, the statistics office said. Food sales dropped 0.3 percent, while non-food sales declined 3.2 percent. ..Kingfisher Plc Europe’s largest home-improvement retailer, said today that profit fell 23 percent on a writedown of the value of its Chinese unit and declining U.K. sales. Debenhams Plc, the second-largest U.K. clothing department chain, said March 17 that first-half same-store sales dropped as the economic slump and winter storms dissuaded shoppers. ..Inflation unexpectedly accelerated to 3.2 percent in February, driven by the cost of imports such as food. J Sainsbury Plc Britain’s third-largest supermarket chain, yesterday reported its fastest quarterly sales growth in two years. ..The U.K. economy shrank 1.5 percent in the fourth quarter, the most since 1980, and King told lawmakers on March 24 he expects a similar rate of contraction in the first three months of this year. The bank has embarked on a program to spend as much as 150 billion pounds ($219 billion) to buy U.K. government debt, corporate bonds and other assets with newly created money in order to ease credit strains and encourage spending. ..Investment fell 1.5 percent in the last three months of 2008, revised from a previous report of 3.9 percent, the statistics office said in a separate report today. The final estimate of fourth-quarter gross domestic product will be published tomorrow. .
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