Consumer confidence has plummeted due to widespread speculation regarding the upcoming budget announcement by the chancellor, as per recent figures. The British Retail Consortium (BRC) has attributed the public’s diminishing expectations of their spending over the next three months to «strong hints» from the government about potential income tax hikes, particularly as the holiday season approaches.
Despite the cancellation of a proposed increase in income tax rates last week, Sir Keir Starmer has not ruled out freezing income tax thresholds, a move contested by the Conservatives as it could result in a stealth tax rise by pushing individuals into higher tax brackets even with wage increases. BRC’s chief executive, Helen Dickinson, highlighted that prolonged uncertainty has heightened public apprehension about their financial situations and the broader economy. Data from the BRC and Opinium indicates a significant drop in consumer expectations for the economy in the next three months, down to minus 44 from minus 35 in October.
Dickinson emphasized the necessity for Rachel Reeves to take action to alleviate the mounting cost pressures faced by retailers, which could help mitigate price increases. In related news, the Recruitment and Employment Confederation reported a positive trend in the job market, with a 2.1% increase in new job adverts last month compared to September, totaling over 1.6 million. However, Reeves’s decision to raise national insurance contributions for employers in the previous year’s budget was linked to a market slowdown and a rise in unemployment rates.
The report noted a rise in job adverts for medical radiographers, delivery drivers, couriers, and further education teaching professionals, indicating a potential recovery in the job market, albeit described as «fragile.» Additionally, projections suggest that the extension of the Docklands Light Railway (DLR) to Thamesmead, backed by the chancellor at a cost of £1.7bn, could unlock thousands of new homes and address the longstanding lack of public transport in the area since its development in the 1960s.
London Mayor Sir Sadiq Khan welcomed reports of the DLR extension, anticipating its transformative impact on travel in an historically underserved part of the capital. The extension is expected to generate opportunities for thousands of new jobs and homes, potentially attracting nearly £18bn of private investment and unlocking land for 25,000 new homes. These developments are poised to not only boost the local economy but also have broader national economic implications.
SOURCE