It’s more bad news for the Chancellor as December’s retail sales took a sharper dive than expected, with businesses and consumers still grappling with the fallout of Reeves’ tax raid right before Christmas. The Office for National Statistics revealed a 0.3% drop in sales volumes over the festive season, shattering analysts’ rosier forecasts of a 0.4% increase. Strip out fuel, and the picture darkens further with a 0.6% monthly decline. Even worse, November’s figures were quietly downgraded from 0.2% growth to 0.1%…
Meanwhile, the pound slid further, down 0.5% against the dollar and 0.4% against the euro. Elliott Jordan-Doak of Pantheon Macroeconomics warned the dismal retail performance could mean the economy contracted in Q4, stating, “Softening sales add to disappointment from November GDP earlier this week, suggesting the economy stagnated in Q4 or may even have contracted slightly.” Next boss added that Reeves’ NICs hikes is choking entry-level job opportunities, lamenting that “the axe has fallen particularly hard” on people trying to get first jobs as consumer confidence plunges. Reeves’ so-called “growth plan” is more like a wrecking ball…
Andy Haldane, Burnham’s recent adviser on the economy who has not taken up a No10 job, told Andrew Marr on LBC:
“The market now suspects that this is a traditional tax-and-spend socialist government with better TikTok videos…
imposing windfall taxes on oil & gas or on banks or upping capital gains tax would […] repeat the mistake that Rachel made […] The Achilles heel, the fiscal Achilles heel of this government thus far has been its unwillingness and/or inability to cut public spending.”