Consumer Confidence Falls Amid Budget Speculation

Consumer confidence has fallen amid rampant speculation about what the Chancellor will announce in the Budget. The British Retail Consortium (BRC) blamed "strong hints" from the government of income tax rises for the public’s falling expectations about their spending over the next three months – even with Christmas just around the corner.

Impact of Tax Rise Speculation

While an increase in income tax rates was scrapped last week, Sir Keir Starmer has refused to rule out freezing income tax thresholds – which Conservatives say amounts to a secret tax increase because it encourages people to pay higher tax rates even as their wages rise. BRC chief executive Helen Dickinson said months of uncertainty had “increased public concerns about their own finances and the wider economy”.

Consumer Expectations

According to data from BRC and Opinium, consumer expectations for the economic situation in the next three months have fallen significantly from minus 35 in October to minus 44. Ms Dickinson said the Chancellor needed to take action to "reduce the rising cost burden facing retailers", which she said would "keep price rises under control".

Labor Market Shows Signs of Recovery

Somewhat more encouraging news is new research that suggests the job market may be on the up. According to the Recruitment and Employment Confederation, the number of new job advertisements last month was 754,359, up 2.1% from September, bringing the total to over 1.6 million. The report said there had been an increase in adverts for medical radiologists, delivery drivers and couriers, as well as further education teachers. However, it warned that the apparent recovery was “fragile”.

DLR Extension to Receive Funding

One major development expected in the budget is the funding for an extension of London’s DLR. The Chancellor will back a £1.7 billion extension of the Docklands Light Railway to Thamesmead, opening up thousands of new homes. The plan would see the line extended from Gallions Reach, near London City Airport, and include a new station in Beckton as well as Thamesmead itself. This is expected to free up land for 25,000 new homes and up to 10,000 new jobs, along with almost £18 billion of private investment in the region.