UK supermarket sales have plummeted for four consecutive months. That hoped-for consumer spending surge on Black Friday? Even with retailers discounting heavily leading up to the holiday, overall retail spending dropped by 0.1%. Analysts had expected a slight increase of 0.4%, suggesting that shoppers were still reluctant to shell out cash in the face of persistent economic uncertainty.
This backdrop of pre-Budget uncertainty really knocked consumer confidence. These latest figures tell a different story than what we’ve gotten used to hearing. UK borrowing soared to £11.7 billion in November, well above expectations from analysts for a figure of around £10 billion. This figure represents a £1.9 billion drop on the same month last year. It’s the third lowest borrowing level for November in four years.
Retail sales are decidedly a primary measure that terrify the economists. This decrease follows a surge in employment between June and September. As the decision neared, economist Rob Wood pointed to the damaging effect that the turbulent build-up to the Budget was having on consumer confidence. He stated, “The chaotic run-up to the Budget hit consumer spending, driving retail sales into two consecutive monthly falls after a run of four rises from June to September.”
UK government borrowing for the current financial year to November has rocketed to £132.3 billion. This figure is £10 billion more than it was at this time last year. This trend indicates a growing fiscal challenge for the government, which is striving to “deliver on our pledge to cut debt and borrowing,” according to Chief Secretary to the Treasury James Murray.