Official data from October showed that British retail sales dropped far more than anticipated, adding to previous indications of a slowdown in the economy ahead of Prime Minister Keir Starmer’s new government’s first budget.
Sales volumes decreased by 0.7% from September, while a Reuters survey of economists predicted a median decline of 0.3%.
The decline has been the most severe since June, when sales dropped by 1.0% from May. From an initial projection of a 0.3% gain, a monthly increase in sales in September was revised down to 0.1%. Following the statistics, sterling dropped by around a fifth of a cent vs the US dollar.
According to the Office for National Statistics, retailers stated that consumers were holding back on spending in anticipation of the incoming administration’s first tax and expenditure budget on October 30.
According to official figures released last week, the economy’s momentum deteriorated in the months leading up to the budget, with the gross domestic product increasing by just 0.1% from July to September.
There were some indications that Britons had at least somewhat recovered from their anxiety following the budget. Finance Minister Rachel Reeves spared individuals from her most significant tax rises, which instead fell on employers.
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