The post‐VAT recovery in retail sales was sharply reversed in January, with preliminary DTI figures showing a 2.6% fall in the retail index. Not surprisingly retail prices showed a very different picture. The retail price index had one of its sharpest increases in January, rising from 188.2 in the previous month to 191.8, bringing the year‐on‐year increase in the index to a post‐war record of 12%. The uncertainty created by a General Election was far from resolved by a result which gave decisive power to neither party. The early February low of just under 300 on the FT index marked the bottom of the bear market which started in April 1972. By Election day this had moved up slowly to 335, but fell sharply 25.5 points on 1 March when the uncertain Election result became evident. At the time of going to press, however, it was not clear how the market would react to a political situation unprecedented since the early 1930's.
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