Peston on the end of the retail boom

Robert Peston rather than celebrating the news from Marks and Spencer this morning believes that we may be witnessing the end of the era of retailing.

In 2000 he writes,

the ratio of UK households' debt to their disposable income was 100%.In other words, our borrowings were roughly equivalent to all the money we have available for spending after paying taxes.

By 2007

it had risen to 154% - and probably rose even higher through most of last year.
The availability of a mountain of cheap debt pumped up the house-price bubble and gave added oomph to a retail-spending boom of unprecedented length and intensity.

Not surprisngly the retail industry saw this as a further incentive for building yet more stores,shopping centres etc.Whereas at the moment the government is trying to maintain the consumer fed boom,rightly or wrongly Peston believes that two hits are looming on the horizon.

1.there is the strong probability that taxes will have to rise after the next election, as the new government tries to put some kind of brake on the rise and rise of public-sector debt - which will squeeze households' disposable income.

2.interest rates will rise again, as and when the Bank of England is persuaded that inflation rather than deflation is the threat.