Feb. 17 (Bloomberg) -- U.K. retailers have boosted cash reserves by 50 percent in the last five years as concern about a slowing domestic economy causes them to curb investment in local economies, according to the British Retail Consortium.
Average cash holdings increased to 424 million pounds ($670 million) in 2011 from 283 million pounds in 2006, the advocacy group said in a budget submission to the U.K. government, citing a study by Oxford Economics of 21 FTSE-listed retailers.
The U.K. economy shrank 0.2 percent in the fourth quarter, while unemployment held at the highest rate for 16 years.
“These figures suggest the chancellor has much more to do to inspire confidence in business,” BRC Director General Stephen Robertson said. “Retail could drive growth and job creation across the U.K. if the trading conditions were right. But, over the last five years, retailers have been accumulating cash, they are often too fearful to invest.”
Companies may be encouraged to invest by a cut in business rates, lower European Union barriers for online retailers, enhanced use by landlords of small business leases and retention of office developments in towns, according to the BRC.
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