Caution remains the watchword on the UK high street. British Retail Consortium data out today highlights that 48% of survey respondents expect the economy to get worse in the next three months, up from 42% in December and 38% in November.Â
This follows on from a raft of other survey data confirming that consumers are in the midst of belt-tightening, with the Consumer Sentiment Index at a 12-month low and the financial outlook for households the weakest since March 2024.
High street brands including Marks and Spencer, Primark and Greggs all signalled increasing headwinds in recent statements, ahead of a 6.7% rise in the minimum wage and higher National Insurance contributions kicking in from April, so ongoing price rises and a tight grip on headcount seems likely.
With recent labour market data already signalling unemployment rose to 4.4% in September to November and vacancies slipping, there is a growing risk that falling business confidence in the face of rising cost pressures will push the UK into recession later in 2025. The government must act with urgency on growth investment funded by the budget whilst also shifting its message to encourage consumers and businesses to spend. The next couple of months will be crucial.
