(Bloomberg) — UK retail sales grew more slowly than expected in November suggesting Christmas shoppers might not boost the economy in the crucial final months of the year. The volume of goods sold in stores and online rose 0.2% last month, with supermarket sales partly offsetting a decline in clothing buys, according to figures published by the Office for National Statistics.
Economists had expected a 0.5% increase, despite wet and gloomy weather conditions that weighed on sales. The figures dent retailers’ hopes for a turnaround during the key Christmas period, as consumers remain cautious in the wake of the Labour government’s first budget.
They’re also a blow to Prime Minister Keir Starmer’s growth ambitions more broadly, with consumers making up two-thirds of the economy. “Caution lingers, slowing momentum in the economy,” said Nicholas Found, a senior consultant at Retail Economics. “Anxiety following the Autumn Budget combined with a mild start to November delayed spending on seasonal items.
” The report caps a week of data releases suggesting the UK economy is edging toward “stagflation” — a low-growth, high-inflation environment. Inflation increase to rise above the Bank of England’s 2% target due to rising goods prices, while wage growth came in hotter than expected. The BOE also downgraded its growth outlook as it now expects the economy flatten in the final quarter of the year.
What Bloomberg Economics Says...
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