Retail Sentiment Weakens on Employment Conditions in the UK

According to a survey conducted by CBI, retail sentiment regarding conditions in the UK sharply deteriorated in November 2024, with the rate of decline reaching the fastest pace in the last two years. Retail sales volumes experienced a moderate decline of 18% in the year leading up to November 2024. The CBI survey indicates that retailers expect this decline to continue at a faster pace of 29% in December.

Investment plans for the next year, while also less sharp, fell from 35% in August to 27%. CBI Chief Economist Ben Jones stated, "While trading conditions have shown some improvement since mid-year, retailers continue to report disappointing sales. Retailers last felt this pessimistic in November 2022, during the peak of the inflation shock. This makes this month's sharp decline even more significant. Next year, the sharp increase in employers’ National Insurance will hit retailers hard. The planned rise in business rates for high-value properties will also impose significant operational costs for distribution centers. The government must urgently partner with businesses in the distribution sector to alleviate the cumulative cost burden that threatens to weaken investments and hiring next year and result in higher prices for consumers."