Retail gross sales plunged unexpectedly within the run-up to Christmas, official figures present, after Rachel Reeves introduced a file tax raid.
Gross sales volumes dropped by 0.3pc in December, in response to the Workplace for Nationwide Statistics (ONS), in comparison with analyst forecasts for development of 0.4pc.
The earlier month’s gross sales had been additionally revised decrease from 0.2pc development to 0.1pc.
The decline within the essential run-up to Christmas comes after the October Finances raised taxes by £40bn, together with a £25bn hike in nationwide insurance coverage contributions for employers.
A weak month for supermarkets helped drag down total volumes, offsetting an increase in gross sales for clothes and footwear retailers.
The drop in gross sales will probably gas fears of an extra decline when nationwide insurance coverage adjustments take impact in April, together with a rise within the minimal wage, with corporations anticipating to scale back hiring or lower jobs.
The worth of the pound has dropped amid doubts in regards to the Chancellor’s plans for development, falling 0.5pc towards the greenback and 0.4pc towards the euro.
Nicholas Discovered of Retail Economics stated: “With retailers sometimes working on low single-digit margins, weak development leaves little room for manoeuvre as employer tax will increase loom.
“This can inevitably widen the hole between retailers who can put money into operational resilience and those who can’t afford to – risking greater costs, hiring freezes and retailer closures.”
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