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Retailers expect a ‘false dawn’ recovery

The chairman of the John Lewis Partnership has warned that Britain’s retailers are heading for a difficult second half of the year following the recent ‘false dawn’ recovery in consumer spending. Charlie Mayfield said that once the general election was over, consumers could expect tax rises, public sector spending cuts and potentially higher interest rates leading to tougher trading conditions. Many retailers have already suffered a tough January after trade was hit by the bad weather, forcing them to extend clearance sales.

Mr Mayfield said, ‘There has been the biggest crisis in global financing ever and getting out of it has cost an eye-watering amount of money and we simply haven’t started to pay the price for that’.

Stewart Binnie, the non-executive president at Aurora Fashions, which owns Karen Millen, Coast, Oasis and Warehouse, yesterday warned that fashion retailers would be badly affected if the next government increased VAT beyond 17.5% to pay the public sector deficit, and had already been hit by considerable unemployment of young people, who are their biggest market but have since become more cautious with their spending. 

Women hit by pensions divide

New rules being introduced next month would mean that women who turn 60 before April 6 this year will qualify for only three-quarters of the state pension – around £75 a week – if they have been working for less than 39 years. But women who turn 60 on or after this date can claim a full state pension of £97.65 if they have been working for just 30 years. The difference adds up to around £10,400 over ten years.

Only those who have paid extra to top up their National Insurance contributions will be exempt from having their pensions docked. The change was introduced to help women who have lost out on making National Insurance contributions due to taking time off to raise a family or look after elderly parents.  But setting a date rather than phasing in the changes has led some critics to refer to a ‘pensions apartheid’ between women whose retirements fall on either side of April 6.

 

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