Britain has ‘Alice in Wongaland’ economy; Britain has an “Alice in Wongaland” economy in which people are taking out payday loans and raiding their savings to fuel shopping sprees

Britain has ‘Alice in Wongaland’ economy

Britain has an “Alice in Wongaland” economy in which people are taking out payday loans and raiding their savings to fuel shopping sprees.

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Britain has an “Alice in Wongaland” economy in which people are taking out payday loans and raiding their savings to fuel shopping sprees. Photo: Alamy

By Steven Swinford, Senior Political Correspondent

9:58AM BST 15 Aug 2013

Retail figures, published by the Office for National Statistics this morning, showed that people are returning to Britain’s High Streets. Sales rose at their fastest annual rate in over two years in July, official data showed on Thursday. Volumes rose 1.1pc on the month, almost twice as fast as expected to give an annual rise of 3pc and the highest since January 2011. The Office for National Statistics said feedback from supermarkets suggested the sunny weather had boosted sales of food, alcohol and clothing. Experts have said that the warm weather, increased consumer confidence and the “feel good factor” created by the Royal Wedding stimulated growth.However Ann Pettifor, of Prime Economics, warned that the improved figures were fuelled by debt and will ultimately prove to be “unsustainable”

She also warned that the government’s Help to Buy scheme, under which people can take out government-backed mortgages to buy new homes, will create another “bubble”.

She said: “I think it’s artificial and can’t be sustained. People’s incomes are falling in real terms, and have done so for five years. Now there’s been this sudden, go on let’s just go made because everyone says its recovery.

“At a fundamental level it’s quite dangerous because household debt is still 153 per cent of GDP.

“There’s nothing seriously underpinning this recovery, and that’s why it’s Alice in Wongaland, the confidence fairy is out there.”

Britain’s High Streets have enjoyed a 1.4pc increase in shopper footfall, according to figures published by the British Retail Consortium last month.

Helen Dickinson, Director General of the British Retail Consortium, said: “Our recent retail sales figures showed a strong performance from fashion and footwear and it is likely that shoppers took advantage of the start of the sunshine in June to visit their local high street and buy items for their summer wardrobes.”

Mrs Pettifor also raised concerns about the government’s Help to Buy scheme.

She said: “We are making people think they can buy another property and taking out mortgages which they simply can’t afford in the long term. Those prices will fall at some point.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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