Retail sales falter as Budget tensions kick in
Retail sales are set to decline at a faster pace in the weeks leading up to the November Budget, a new survey has indicated, as Brits hold out for extra taxes and higher prices.
A Confederation of British Industry (CBI) survey has suggested that retail sales could collapse in November, reflecting household fears about being targeted by Chancellor Rachel Reeves in another sweeping tax raid.
Its survey on the retail sector suggested that sales volumes were expected to fall at a faster pace in November, with the weighted balance set to fall from -29 per cent in September to -39 per cent next month.
The CBI also suggested that whole sales volumes fell at a rapid pace in the year to October.
Sales have also remained below seasonal norms in data collected over the last two months, according to researchers, who asked some 192 retailers and wholesalers on company prospects.
It is widely expected that Reeves could target households more than businesses to avoid a further slump in hiring and a spike in inflation over the next year.
Martin Sartorius, principal economist at the CBI, said the retail sector was suffering from a “prolonged downturn” as annual sales volumes had declined for the thirteenth consecutive period.
“Firms reported that consumer confidence remains poor, compounded by elevated caution ahead of next month’s Autumn Budget.
“Weak demand conditions were also reflected in further sales declines across wholesaling and motor trades.”
“Persistent uncertainty ahead of the Autumn Budget is deepening the strain on retailers and other distribution firms that are still grappling with the effects of last year’s fiscal decisions.”
Retail sales higher than expected
CBI data suggested there was a small increase in online retail sales volumes but would contract next month.
The gloomy survey contrasted official figures on retail sales published last week.
The Office for National Statistics (ONS) said sales had jumped to their highest levels since 2022 in September.
It said sales volumes rose 0.5 per cent last month, with demand spiking for gold and boosting online jewellers.
The figure for September was higher than economists expected.
ONS senior statistician Hannah Finselbach said: “Although food stores saw very little growth, good weather in July and August boosted sales of clothing, while online retailing also did well.”