London (Reuters) – According to new data, Britain’s economy is slowing down because people are having to pay more for everything. Retail sales fell and consumer confidence fell to near-record lows on Friday.
Official statistics and surveys show that the economy will slow down dramatically, if not go into recession, in the next few months. The pound fell more than a penny to drop to below $1.29 for the first time since November 2020, when the last time it did this was in November 2019.
S&P Global’s (NYSE: SPGI) closely watched business activity index showed that growth slowed more than expected this month because businesses had to deal with rising costs and became much more pessimistic about the future. (NYSE:
Retail sales volumes fell by 1.4 percent in March compared to February, a lower figure than predicted by any of the Reuters polled analysts.
Earlier on Friday, market research company GfK reported that consumer confidence fell to almost its lowest level in over 50 years this month.
A graph shows that consumer confidence in the UK is at an all-time low in April, according to GfK. This graph shows that consumer confidence in the UK is at an all-time low in April, according to GfK.
In aggregate, the figures reinforced the Bank of England’s rising worry about the dual difficulties of decreasing demand and inflation at a 30-year high of 7%, which is expected to increase further than the central bank’s 2% objective.
Governator Andrew Bailey said Thursday that the Bank of England is trying to keep inflation down and avoid a recession. This is something that other major central banks around the world are worried about, as well.
“Whether the UK enters recession is an open question, “ING economist James Smith said, emphasising the potential for reserves accumulated by many families during the coronavirus outbreak to continue fueling growth.
“While the verdict is still out, we believe the Bank of England is more likely to boost rates once or twice more before hitting the stop button during the summer.”
SALES IN THE RETAIL INDUSTRY ARE DOWN.
In April, the S&P Global Composite Purchasing Managers’ Index decreased from 60.9 to 57.6. Experts who were asked by Reuters had predicted that the index would fall to 59.0. The index was still well above the 50-point growth threshold.
Consumer-facing businesses are going to have a hard time in the next few months because GfK’s indicator of how people feel about their future finances has hit a record low.
The Office for National Statistics said that food and fuel sales declined significantly last month, citing increased costs as a likely factor. Additionally, online retail sales decreased.
According to Keith Church, an economist at risk consultancy 4most, retail sales volumes are 2.2 percent higher than they were in February 2020, but they are still much lower than they would have been had growth continued on its pre-pandemic path.
Tesco (OTC: TSCDY), the UK’s largest retailer, warned earlier this month of a decline in earnings as rising inflation squeezes the grocery business and its consumers.(OTC: