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UK Retail Sales Fall 1.1% in October, Sharply Missing Expectations
UK retail sales fell 1.1% in October, sharply missing expectations for flat growth. Economists cite high saving rates, weaker consumer sentiment, and fears of tax hikes ahead of the November budget.
Official data released on Friday showed that British retail sales dropped by 1.1% in October—far worse than expected. Economists polled by Reuters had forecast sales to remain flat compared to the previous month.
The weaker data comes as Finance Minister Rachel Reeves may need to raise £20–30 billion ($26–39 billion) through higher taxes, amid anticipated growth downgrades from the government’s budget watchdog, rising borrowing costs, and Parliament’s resistance to planned welfare cuts.
Economists say sluggish consumer spending is being driven by persistently high saving rates, reflecting the lingering impact of the 2022 inflation surge, a softening job market, and concerns over tax increases expected in the November budget.
Recent updates from major retailers highlighted growing anxiety over how the upcoming budget could dampen consumer sentiment—particularly discretionary spending. Even so, supermarket chain Sainsbury’s (SBRY.L) and food-and-fashion retailer Marks & Spencer (MKS.L) remained upbeat about their Christmas trading outlook.
