How do you shock an economist?

Some pieces of news come as a total shock, like the BBC’s decision to give Gary Neville a guest chair on Dragon’s Den.  Other news items are dressed up as a surprise, but really this is a ruse by a journalist to make the story (or their job) more appealing.

Take UK retail sales.  The latest report from the Office for National Statistics (ONS) confirmed retail sales fell more than expected in September due to the sunny weather (September 2023 was the warmest month on record for the planet as a whole).  Sales volumes fell 0.9% in the month, the ONS said, while economists had predicted a 0.2% fall.

Only back in our “Routine Routine Routine” article last month, the newsroom reported on the belief of the ONS that shoppers were put off from buying things due to the wet weather in July.  Please make your mind up!

Of course, the more obvious reason why sales are struggling – lots of people haven’t got any money!  Grant Fitzner, the ONS chief economist, said sales "fell notably" in September as the quick pace of price rises put shoppers off, "particularly for sales of non-essential goods".  So maybe you do know the answer.

Or maybe not, as Mr Fitzner continued "however, September's unseasonable warmth did help drive up food sales a little". I’m not sure I eat more when it’s warmer, or is the increase all down to the salad which goes uneaten at every British BBQ, along with the sausages burnt by your Uncle Geoff?

The GfK consumer confidence index — a measure of how much Joe Public in Britain view their personal finances and broader economic prospects — fell nine points from minus 21 to minus 30 in October, the research group said today (Friday 20 October).  Respondents to the survey, which was based on interviews conducted in the first half of October, were less positive about their personal financial situation and the general economic picture compared with last month. 

The reading, which completely undoes the rises over the last two months was the largest drop since March 2020, a month obviously affected by the start of the first lockdown.  Interestingly, economists had been predicting a rise from -21 to -20.  When are economists going to the place of meteorologists in our national teasing, we wonder? 

Joe Staton, client strategy director at GfK, said consumers’ “growing unease” had been caused by “fierce headwinds of meeting the accelerating costs of heating our homes, filling our petrol tanks, coping with surging mortgage and rental rates, a slowing jobs market and now the uncertainties posed by conflict in the Middle East”.

The GfK sub-index that tracks whether consumers think now is a good time to make big purchases, such as buying a car or house, dropped 14 points from September to minus 34 in October.  Staton said this fall would “concern retailers across the land in the run-up to Christmas”, when people typically spend more. 

So how do you shock an economist as Halloween approaches? 

Just get them to look back at their predictions.