UK Retailers’ Confidence Hits Two-Year Low, CBI Reports

The Confederation of British Industry (CBI) has reported that British retailers’ confidence has plunged to its lowest level in two years. This decline is comparable to the financial strain experienced during the energy price surge and market instability following former Prime Minister Liz Truss’s fiscal policies.

According to the CBI’s quarterly survey, the retail sector’s business outlook fell sharply to -21 in November, down from -13 in August, matching November 2022’s low of -22. Additionally, the CBI’s monthly retail sales balance dropped to -18 in November, compared to -6 in October, marking its weakest performance since August.

The CBI attributed part of this decline to the 25 billion pound ($31 billion) employer tax increase announced in Finance Minister Rachel Reeves’ October 30 budget. Retailers are expected to face significant challenges next year due to higher Employers’ National Insurance contributions and increased business rates for high-value properties.

CBI lead economist Ben Jones highlighted the compounding pressures on the retail industry, stating, “The stark rise in Employers’ National Insurance next year will hit retailers hard. And the planned increase in business rates for higher-value properties will add significant operational costs for distribution centres.”

The retail sector’s outlook remains uncertain as economic pressures persist.
(Conversion rate: $1 = 0.7945 pounds)