UK retail sales rise 0.2% in November

UK retail sales rose by 0.2% in November, missing expectations, suggesting consumers have overcome their concerns about the new government’s first budget. However, it added to signs that economic momentum is slowing.

Earlier, official data showed the British economy contracted in September and October, marking the first back-to-back contractions since the Covid-19 pandemic.

The slowdown in economic activity was largely linked to concerns about the Reeves Budget announced on Oct. 30, which included tax increases on businesses rather than consumers. Surveys also showed a decline in hiring plans among firms since the government announced a 25 billion pound ($31.3 billion) increase in social security contributions for companies.

The Bank of England said on Thursday that the economy would see zero growth in the final three months of 2024. But it stopped short of cutting interest rates due to persistent inflationary pressures.