January at last. The frenzy of consumer spending is over for another 11 months. The roar of the advertisers now drops by a decibel or two. The relentless, bone-shaking ride that is modern-day getting and spending slows down a notch.
It is the season of restraint, self-denial, thrift even. But there is one final act before the curtain drops on the retail year of 2004: the ritual of Christmas trading statements. Over the next couple of weeks, almost every publicly listed retailer will publish details of its December takings. This is important because many shops make the bulk of their profits in the few weeks before and after 25 December. It is important for the wider economy and for jobs. Almost three million people - one in nine of the British workforce - are employed in our 311,000 shops.
It is important for the Exchequer, too. Every pound of non-food sales generates an extra 17.5p of VAT receipts. Booming demand for grog sales makes December a happy month for the exciseman as well.
Has it been a good Christmas? The anecdotal evidence is mixed. My own foray on to the high street would suggest it has been dire. Three days before Christmas Day - when you'd expect the spending mania to be at its height - I ventured on to Regent Street. I spent 40 minutes in the lingerie department of Dickins & Jones and got the sole attention of the sales assistant throughout - because there were no other customers whatsoever. I then popped next door to Hamleys for a couple of Tamagotchis (don't ask) and didn't even have to queue.
Some retailers have done OK. John Lewis, the worker co-op that owns Waitrose, has been chipper in its weekly updates. Some of the big shopping centres have reported record visitor numbers. But the mood overall is more sombre. Shares in Woolworths, the first listed retailer to report, have slumped by 8 per cent.
After years of shopping their hearts out, British consumers may finally be starting to flag. The five interest-rate hikes since November 2003 are being felt, though there is a time lag because of the way mortgage bills are structured. Rising taxes and utility costs are eating into disposable incomes. Above all, people feel less wealthy as their homes stop rising in value and start to depreciate. Many are also deeply in hock.
The retail sector has been a brilliant creator of jobs in Britain, on average hiring 1,000 extra recruits per week every week for five years. It is an especially good source of work for the low-skilled and for women who want flexible, part-time work. Yet retailers feel rather unloved in Whitehall and Westminster, which can still be a bit sniffy about shop jobs, regarding them as somehow inferior to factory jobs. Retail will never produce the same balance-of-trade benefits as manufacturing, but we are starting to produce a few world beaters such as Tesco and Kingfisher, whose success with B&Q in China is the envy of retail groups around the world.
If consumption does continue to slow, then so will retail job creation. A serious slowdown would lead to retailers shedding tens of thousands of those newly created jobs. Expect to hear such outcomes vociferously put forward if it again looks likely that the Chancellor will raise National Insurance, a tax on employment. Expect to hear them argued in spades if the public finances deteriorate so badly that the Chancellor is forced to consider lifting the standard rate of VAT. At least one senior figure in retailing fears just such a move - to 20 per cent - after the next election.
Britain's growth is unbalanced. Consumption needs to slow, saving needs to rise, personal debt to be paid down. Capital investment and exports need to take up some of the slack. How well Britain makes the transition to slow consumption growth (or even to no consumption growth) will be one of the major stories of 2005 and 2006.
The £194m disgorged by City firms on Christmas Eve in settlement of the split capital investment trusts scandal looks niggardly. The Financial Services Authority asked initially for £350m. Investors in these products - often marketed as ultra-safe - will get back only about 55p to 75p for every pound lost.
The lack of scalps and the absence of blame is just as worrying. A handful of people have agreed not to work in the City for a while. No one is personally shamed, no one is personally fined. The FSA statement is a masterpiece of polite blandness. The settlement delivers compensation, but at a cost.
At best, City executives in dozens of firms failed to spot that customers were being fleeced. At worst, they deliberately turned a blind eye to, or actively colluded in, the abuse. Yet they have largely kept their jobs and kept the bonuses financed by their firms' ill-gotten gains.
Patrick Hosking is investment editor of the Times
