Things could get worse before they get better with household budgets facing their worst year since 2013.
0.3% (the amount retail sales declined by in January) may not sound like much, but when you are trying to recover from a 2.1% “plunge”, as Bloomberg has called it, in December, traditionally a storming month for retailers, it’s time to admit there’s a problem.
Figures released by the Office of National Statistics today confounded expectations that retail sales would recover in January and post gains of up to 1% – nobody expected the worst performance since 2013!
So, what’s the story? Well, it’s actually taken longer than expected, but austerity hit UK households are finally saying “no more spending”, which not coincidentally, is driving prices up.
Inflation rose above 1.8% last month and cash strapped parents are asking “do we really need to hit the high street?”, or even shop for goodies online (yes, online sales are down too).
Thanks to Brexit, imports are becoming more expensive, or smaller (witness Toblerone-gate), and consumers are simply saying “no”.
But it doesn’t end there – consumers are unwilling to borrow, too, according to the BOE, and with interest rates expected to increase from the benchmark 0.25% possibly as early as the end of this year, there is plenty of doom and gloom being prophesied by traders, analysts, and economists.
George Osborne had it right, it seems, when he described Britons as “makers, doers and savers”.
Only he meant to say “make do-ers”.
These days, the only thing that rings true about the budget is that battered old red case. It’s not been replaced in more than 100 years – probably because we can’t afford to replace it.
Get ready to welcome back knee patches, holey jumpers and trips to Iceland; Britain’s favourite supermarket.