The Perfect Enemy | Retail sales still below pre-Covid levels as UK faces grim outlook after autumn statement – business live
December 2, 2022
Read Time:28 Minute

Good morning, and welcome to our rolling coverage of business, the financial markets and the economy.

Britain’s retail sales remain below their pre-pandemic levels, as the UK heads into a painful recession and inflation takes a big bite out of incomes.

Sales volumes at shops across Britain have shrunk by 2.4% over the last three months, new data from the Office for National Statistics show, despite a small pick-up in October after September’s trading was disrupted by Queen Elizabeth’s State Funeral.

That continues the downward trend seen since summer 2021, as the cost of living squeeze has gripped households.

<gu-island name="TweetBlockComponent" deferuntil="visible" props="{"element":{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","html":"

Retail sales volumes rose by 0.6% in October 2022 following a fall of 1.5% in September.

Retail remains 0.6% below its pre #COVID19 level.

➡️ https://t.co/yBOtcYl7Zv pic.twitter.com/O0XjK4Bgej

&mdash; Office for National Statistics (ONS) (@ONS) November 18, 2022

n","url":"https://twitter.com/ONS/status/1593499591185502208","id":"1593499591185502208","hasMedia":false,"role":"inline","isThirdPartyTracking":false,"source":"Twitter","elementId":"7b70bb1f-4722-4e11-a97c-3de0e0709e24"}}”>

Retail sales volumes rose by 0.6% in October 2022 following a fall of 1.5% in September.

Retail remains 0.6% below its pre #COVID19 level.

➡️ https://t.co/yBOtcYl7Zv pic.twitter.com/O0XjK4Bgej

— Office for National Statistics (ONS) (@ONS) November 18, 2022

Food store sales volumes fell by 1.0% in October 2022 and were 4.1% below their pre-coronavirus levels of February 2020 levels – as some people were unable to afford as much to eat.

The ONS says:

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}Food sales volumes have followed a downward trend since summer 2021 following the lifting of restrictions on hospitality.

In recent months, supermarkets have highlighted that they are seeing a decline in volumes sold because of increased cost of living and food prices.

But there was strong growth in second-hand goods stores (particularly auctioning houses).

The slowdown in retail sales has already forced some retailers to the wall, with Made.com and Joules both filing for administration this month.

In October alone, sales picked up by 0.6% after a 1.5% tumble in September when many shops closed out of respect.

But compared to October 2021, people actually bought 6.1% less stuff – but had to spend 4.8% more to get it, due to inflation.

And compared to before the pandemic, retail sales are still down 0.6%.

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Commenting on today’s retail sales figures for October, ONS director of economic statistics Darren Morgan said: (1/2)

⬇️ pic.twitter.com/K9SIDpY4HP

&mdash; Office for National Statistics (ONS) (@ONS) November 18, 2022

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Commenting on today’s retail sales figures for October, ONS director of economic statistics Darren Morgan said: (1/2)

⬇️ pic.twitter.com/K9SIDpY4HP

— Office for National Statistics (ONS) (@ONS) November 18, 2022

<gu-island name="TweetBlockComponent" deferuntil="visible" props="{"element":{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","html":"

Darren Morgan added: (2/2)

pic.twitter.com/DlgUQbKvqN

&mdash; Office for National Statistics (ONS) (@ONS) November 18, 2022

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Darren Morgan added: (2/2)

pic.twitter.com/DlgUQbKvqN

— Office for National Statistics (ONS) (@ONS) November 18, 2022

Lynda Petherick, head of retail at Accenture in the UK & Ireland, says retailers face a difficult Christmas.

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}“Despite Black Friday coming up next week, it’s unlikely that retailers will be in celebration mode as we head into the festive season this year.

Rising inflation and the fall in real wages will only be adding to the sense of unease over whether this will be a “golden quarter” after all.

Retailers and shoppers alike face more pain in the next few years, with households set for the steepest fall in living standards on record and the highest tax burden since the second world war.

The £30bn of spending cuts and £25bn of tax rises laid out yesterday by chancellor Jeremy Hunt will chill the economy, with record falls in living standards over the next two years that will wipe out eight years of growth.

And we’re in recession, according to the Office for Budget Responsibility, which forecasts GDP will actually shrink by 1.4% during 2023, and not regain pre-pandemic levels until late 2024.

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Friday’s @guardian front page: From bad to worse. https://t.co/OYnNHaB4k0 pic.twitter.com/p3vhSFkouX

&mdash; Pippa Crerar (@PippaCrerar) November 17, 2022

n","url":"https://twitter.com/PippaCrerar/status/1593379833798590466","id":"1593379833798590466","hasMedia":false,"role":"inline","isThirdPartyTracking":false,"source":"Twitter","elementId":"72c8a7fd-451f-4288-a958-0ecc6e0fb2b8"}}”>

Friday’s @guardian front page: From bad to worse. https://t.co/OYnNHaB4k0 pic.twitter.com/p3vhSFkouX

— Pippa Crerar (@PippaCrerar) November 17, 2022

In a sobering near-Budget, Hunt trimmed the budgets of Whitehall departments, broadened the scope of the windfall tax on energy companies, extended the freeze on tax allowances, reduced the threshold for paying the 45% rate of income tax to £125,100, gave local authorities the go-ahead to raise council tax, and raised more from capital gains tax and inheritance tax as part of a plan to convince the financial markets of the government’s intention to reduce its budget deficit.

But Hunt increased spending on the NHS and schools, and deferred most of his tough measures until 2024-25 and beyond, as he stressed the need to avoid a “doom loop” of rising taxes and lower growth.

The agenda

  • 7am GMT: UK retail sales for October

  • 8.30am GMT: ECB president Christine Lagarde gives keynote speech at Frankfurt European Banking Congress

  • 10.30am GMT: Institute for Fiscal Studies holds post Autumn Statement analysis event

  • 3pm GMT: US existing home sales for October

Jeremy Hunt is now on the Today programme.

The chancellor denies that he has launched a raid on millions of working people, saying his plan will “get us through very difficult times”, and gives people certainty.

He points to some glimmers of hope in the OBR’s economic forecasts – including a sharp drop in inflation at the end of next year, and “quite heathy growth” after the recession.

Q: But more middle earners will be paying more tax – a vast swathe of middle income will feel incredibly squeezed.

Hunt says it’s not possible to raise £25bn of taxes by only focusing on a very small group of very rich people.

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}What we’re doing with this very balanced package is asking people who have more to contribute more.

Hunt says there’s also help for poorer households (through increases to the living wage, the pensions triple-lock, and help on energy bills).

The chancellor says:

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}We want to take these difficult decisions in a fair way, that shows people we’re doing what we need to do to right the ship in a very difficult storm.

But we’re also looking after the most vulnerable people, our very important public services as well.

Jeremy Hunt has also defended pencilling tough cuts to public spending after the next election.

He told BBC television that making cuts now would worsen the downturn.

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}“I think it’s important to support the economy, to support families and businesses through a difficult period. So I think it’d be the wrong thing to make that recession worse.

British workers are living through a two-decade wage stagnation costing £15,000.

That’s the overnight verdict from the Resolution Foundation, which also warn that Jeremy Hunt has added to the pressure on the ‘squeezed middle’ through his tax rises.

Resolution has calculated that real wages are now not expected to return to their 2008 level until 2027.

Had wages instead continued to grow at their pre-crisis rate during this unprecedented 19-year pay downturn, they would be £292 a week – or £15,000 a year – higher.

James Smith, Research Director at the Resolution Foundation, said:

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}“As an energy importer during an energy price shock, Britain is getting poorer. Deciding how we do so was, to a significant extent, the choice facing the Chancellor.

He has decided that households will do so with higher energy bills, higher taxes, and worse public services than previously expected.

Whether or not making the choices was tough, the reality of living through the next few years will be.”

Jeremy Hunt also tries to soothe concerns within his own party that he is putting up the tax burden to its highest level since the second world war.

The chancellor tells Sky News that the autumn statement was a “very conservative package” that will sort out the economy, making the recession shallower, and save jobs.

Hunt says:

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}What I would say to my Conservative colleagues is, there is nothing conservative about spending money that you haven’t got.

There is nothing conservative about not tackling inflation.

There’s nothing conservative about ducking difficult decisions that put the economy on track.

<gu-island name="TweetBlockComponent" deferuntil="visible" props="{"element":{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","html":"

&quot;There's nothing conservative about spending money that you haven't got.&quot;

Jeremy Hunt talks to @AnnaJonesSky about planned tax rises which will see the UK's tax burden rise to its highest level since WW2 as a share of GDP.

Live: https://t.co/WUnquWwffN

📺 Sky 501 and YouTube pic.twitter.com/12g3GDEMdl

&mdash; Sky News (@SkyNews) November 18, 2022

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“There’s nothing conservative about spending money that you haven’t got.”

Jeremy Hunt talks to @AnnaJonesSky about planned tax rises which will see the UK’s tax burden rise to its highest level since WW2 as a share of GDP.

Live: https://t.co/WUnquWwffN

📺 Sky 501 and YouTube pic.twitter.com/12g3GDEMdl

— Sky News (@SkyNews) November 18, 2022

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OBR says the tax burden in 2024-25 will be the highest since the Second World War pic.twitter.com/IH4I3MCeZz

&mdash; Ben Kentish (@BenKentish) November 17, 2022

n","url":"https://twitter.com/BenKentish/status/1593263063209238530","id":"1593263063209238530","hasMedia":false,"role":"inline","isThirdPartyTracking":false,"source":"Twitter","elementId":"d3d86059-cd5e-4fb1-8df3-f864056a7ea3"}}”>

OBR says the tax burden in 2024-25 will be the highest since the Second World War pic.twitter.com/IH4I3MCeZz

— Ben Kentish (@BenKentish) November 17, 2022

Finance minister Jeremy Hunt is facing the media this morning after yesterday’s mini-budget.

The chancellor has told Sky News that Britain faces a very challenging time over the next two years but that his budget would help to tackle inflation and put the economy on a stronger footing.

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}“Over the next two years it is going to be challenging, but I think people want a government that is taking difficult decisions, has a plan that will bring down inflation, stop those big rises in the cost of energy bills and the weekly shop,”

Hunt also defended his decision to maintain the pensions triple-lock, which means pensioners will get a 10% increase next April – even wealthy ones.

He explains that all pensioners, not simply the poorest, are feeling the squeeze.

<gu-island name="TweetBlockComponent" deferuntil="visible" props="{"element":{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","html":"

&quot;It is the right thing to do&quot;

Chancellor Jeremy Hunt says 'it is wrong to say only the poorest pensioners are feeling the squeeze' – adding the triple lock is needed at this &quot;tough time&quot;.

More here 👉 https://t.co/WUnquWvHqf

📺 Sky 501, Virgin 602, Freeview 233 and YouTube pic.twitter.com/aYNfnispRM

&mdash; Sky News (@SkyNews) November 18, 2022

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“It is the right thing to do”

Chancellor Jeremy Hunt says ‘it is wrong to say only the poorest pensioners are feeling the squeeze’ – adding the triple lock is needed at this “tough time”.

More here 👉 https://t.co/WUnquWvHqf

📺 Sky 501, Virgin 602, Freeview 233 and YouTube pic.twitter.com/aYNfnispRM

— Sky News (@SkyNews) November 18, 2022

Jeremy Hunt may not have enjoyed reading today’s front pages over his morning cornflakes.

The newspapers have given a damning verdict on yesterday’s autumn statement, with many right-leaning organs particularly critical about the tax rises heading our way.

The Daily Mail have accused the government of hitting workers, with a headline of “Tories soak the strivers”.

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Friday’s @DailyMailUK #MailFrontPages pic.twitter.com/zlUsGsGjtx

&mdash; Daily Mail U.K. (@DailyMailUK) November 17, 2022

n","url":"https://twitter.com/DailyMailUK/status/1593364352278593536","id":"1593364352278593536","hasMedia":false,"role":"inline","isThirdPartyTracking":false,"source":"Twitter","elementId":"e3cc0228-8caf-4d8a-881f-a244d0627ad6"}}”>

Friday’s @DailyMailUK #MailFrontPages pic.twitter.com/zlUsGsGjtx

— Daily Mail U.K. (@DailyMailUK) November 17, 2022

While the Telegraph says the chancellor has protected benefit claimants and pensioners from soaring inflation “with a raid on workers”, in a return to Gordon Brown’s fiscal policies.

<gu-island name="TweetBlockComponent" deferuntil="visible" props="{"element":{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","html":"

🚨 👇The front page of Friday's Daily Telegraph:

'The rhetoric of Osborne…with the policies of Brown' #TomorrowsPapersToday

🗞️ Sign up for the Front Page newsletterhttps://t.co/x8AV4OoUh6 pic.twitter.com/B3PEM5lJMN

&mdash; The Telegraph (@Telegraph) November 18, 2022

n","url":"https://twitter.com/Telegraph/status/1593401752132661249","id":"1593401752132661249","hasMedia":false,"role":"inline","isThirdPartyTracking":false,"source":"Twitter","elementId":"a52e4969-c5e7-47d6-892e-6b4a04ade275"}}”>

🚨 👇The front page of Friday’s Daily Telegraph:

‘The rhetoric of Osborne…with the policies of Brown’ #TomorrowsPapersToday

🗞️ Sign up for the Front Page newsletterhttps://t.co/x8AV4OoUh6 pic.twitter.com/B3PEM5lJMN

— The Telegraph (@Telegraph) November 18, 2022

The Mirror’s verdict is brutally clear – warning of ‘carnage’ as millions face deep pain after a ‘Tory Hell Budget’, and the worst drop in living standards on record.

<gu-island name="TweetBlockComponent" deferuntil="visible" props="{"element":{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","html":"

Tomorrow's Paper Today:
💥CARNAGE
🔴Millions to feel deep pain after Tory hell Budget
🔴Energy bills &amp; joblessness rise, house prices fall
🔴Drop in living standards is the worst since 1956
🔴Hunt and Sunak hail moves and shirk any blame#TomorrowsPapersToday pic.twitter.com/UoQ2RWmC3c

&mdash; The Mirror (@DailyMirror) November 17, 2022

n","url":"https://twitter.com/DailyMirror/status/1593373816612438018","id":"1593373816612438018","hasMedia":false,"role":"inline","isThirdPartyTracking":false,"source":"Twitter","elementId":"36d48765-9747-4e6b-b775-743e4fd08357"}}”>

Tomorrow’s Paper Today:
💥CARNAGE
🔴Millions to feel deep pain after Tory hell Budget
🔴Energy bills & joblessness rise, house prices fall
🔴Drop in living standards is the worst since 1956
🔴Hunt and Sunak hail moves and shirk any blame#TomorrowsPapersToday pic.twitter.com/UoQ2RWmC3c

— The Mirror (@DailyMirror) November 17, 2022

And the Times – which uses one of the brilliant photos from Hunt’s trip to a school yesterday – flags there will be “Years of tax pain ahead” as the chancellor seeks to balance the books.

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Friday's Times: Years of tax pain ahead #TomorrowsPapersToday #TheTimes #Times pic.twitter.com/D7MGZr9gWA

&mdash; Tomorrows Papers Today (@TmorrowsPapers) November 17, 2022

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Friday’s Times: Years of tax pain ahead #TomorrowsPapersToday #TheTimes #Times pic.twitter.com/D7MGZr9gWA

— Tomorrows Papers Today (@TmorrowsPapers) November 17, 2022

Here’s our full round-up:

This morning’s retail sales report also shows a shift back into shopping in stores – as consumers seek out bargains.

Richard Lim, CEO of Retail Economics, explains that some shoppers are keen to avoid paying delivery charges on online purchases:

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}The proportion of spending online remains down on levels seen last year and it seems that consumers feel more in control of their budgets in a physical environment, looking for end-of-aisle discounts and keeping a tighter grip on finances.

But the rebalance towards stores is also likely to have been driven by avoidance of online delivery costs, an increasing number of retailers charging for returns and the squeeze on budgets discouraging over ordering with the intention of returning unwanted products.”

Britain is getting poorer, warns Torsten Bell of Resolution Foundation, in his early analysis of the autumn statement.

And the public will pay the price, with higher energy bills next year, higher tax bills and worse public services in the years ahead.

But Bell also questions whether some of the deep spending cuts, pencilled in for after the next election, will actually happen:

<gu-island name="TweetBlockComponent" deferuntil="visible" props="{"element":{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","html":"

Britain is getting poorer as a country, says @TorstenBell , and in his #AutumnStatement the Chancellor has set out how that pain will be spread: higher energy bills next year; higher tax bills forever; and worse public services in the years ahead. pic.twitter.com/PMZlZa4jBF

&mdash; Resolution Foundation (@resfoundation) November 18, 2022

n","url":"https://twitter.com/resfoundation/status/1593484146302541824","id":"1593484146302541824","hasMedia":false,"role":"inline","isThirdPartyTracking":false,"source":"Twitter","elementId":"234ec39a-2de8-4cd7-ab18-0924063e79b9"}}”>

Britain is getting poorer as a country, says @TorstenBell , and in his #AutumnStatement the Chancellor has set out how that pain will be spread: higher energy bills next year; higher tax bills forever; and worse public services in the years ahead. pic.twitter.com/PMZlZa4jBF

— Resolution Foundation (@resfoundation) November 18, 2022

<gu-island name="TweetBlockComponent" deferuntil="visible" props="{"element":{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","html":"

The Chancellor has delivered an Autumn Statement with the rhetoric of George Osborne and policies of Gordon Brown, says @TorstenBell . Big, concrete tax rises are coupled with deep spending cuts after the next election. People will reasonably ask if they're ever going to happen? pic.twitter.com/c8QbjalEVF

&mdash; Resolution Foundation (@resfoundation) November 18, 2022

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The Chancellor has delivered an Autumn Statement with the rhetoric of George Osborne and policies of Gordon Brown, says @TorstenBell . Big, concrete tax rises are coupled with deep spending cuts after the next election. People will reasonably ask if they’re ever going to happen? pic.twitter.com/c8QbjalEVF

— Resolution Foundation (@resfoundation) November 18, 2022

“It all looks a bit grim, doesn’t it.”

That’s the verdict of Paul Johnson, director of the Institute for Fiscal Studies, following yesterday’s autumn statement.

Speaking to Radio 4’s Today programme, Johnson explains that while Hunt appeared to be returning to fiscal orthodoxy (with tax rises and spending cuts), he’s actually being quite fiscally loose.

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}He’s junked the fiscal rules, he’s got rid of the idea that we have to balance the current budget – in other words, borrow only for investment – he’s accepted most of the additional borrowing that the OBR said the poor economic performance is going to give us.

And yet, we’re still going to have a big increase in taxes.

If you put those two together – lots of borrowing and lots of taxes, you’d think there must be lots of spending, Johnson adds.

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}Well there is quite a lot more spending, actually, over the next year or two. But looking forward post the next election, he’s got some big spending squeezes in there.

So how does that add up? Well, all the borrowing racked up by the UK over recent years is ‘coming home to roost’, Johnson says.

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}We are going to be stuck at £100bn a year being spent on debt interest into the medium term.

And of course, when the economy’s growing so dreadfully badly, there’s just much less money around.

In another blow, British consumer confidence remains close to record-low levels, despite a small rise this month after the financial market turmoil triggered by September’s mini-budget faded.

And soaring inflation and the spectre of recession make a sustained improvement unlikely, market research firm GfK has reported.

GfK’s monthly consumer confidence index, which dates back to 1974, rose in November to -44 from -47 in October, having struck an all-time low of -49 in September.

GfK said the improvement likely reflected relief among the British public that the country’s financial outlook had stabilised following the departure of Prime Minister Liz Truss’s government, whose fiscal plans triggered meltdown in British markets.

<gu-island name="TweetBlockComponent" deferuntil="visible" props="{"element":{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","html":"

UK consumer morale edges higher, but still very low: GfK https://t.co/oEnee6QESG pic.twitter.com/GVnMx8gcay

&mdash; Reuters UK (@ReutersUK) November 18, 2022

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UK consumer morale edges higher, but still very low: GfK https://t.co/oEnee6QESG pic.twitter.com/GVnMx8gcay

— Reuters UK (@ReutersUK) November 18, 2022

Good morning, and welcome to our rolling coverage of business, the financial markets and the economy.

Britain’s retail sales remain below their pre-pandemic levels, as the UK heads into a painful recession and inflation takes a big bite out of incomes.

Sales volumes at shops across Britain have shrunk by 2.4% over the last three months, new data from the Office for National Statistics show, despite a small pick-up in October after September’s trading was disrupted by Queen Elizabeth’s State Funeral.

That continues the downward trend seen since summer 2021, as the cost of living squeeze has gripped households.

<gu-island name="TweetBlockComponent" deferuntil="visible" props="{"element":{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","html":"

Retail sales volumes rose by 0.6% in October 2022 following a fall of 1.5% in September.

Retail remains 0.6% below its pre #COVID19 level.

➡️ https://t.co/yBOtcYl7Zv pic.twitter.com/O0XjK4Bgej

&mdash; Office for National Statistics (ONS) (@ONS) November 18, 2022

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Retail sales volumes rose by 0.6% in October 2022 following a fall of 1.5% in September.

Retail remains 0.6% below its pre #COVID19 level.

➡️ https://t.co/yBOtcYl7Zv pic.twitter.com/O0XjK4Bgej

— Office for National Statistics (ONS) (@ONS) November 18, 2022

Food store sales volumes fell by 1.0% in October 2022 and were 4.1% below their pre-coronavirus levels of February 2020 levels – as some people were unable to afford as much to eat.

The ONS says:

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}Food sales volumes have followed a downward trend since summer 2021 following the lifting of restrictions on hospitality.

In recent months, supermarkets have highlighted that they are seeing a decline in volumes sold because of increased cost of living and food prices.

But there was strong growth in second-hand goods stores (particularly auctioning houses).

The slowdown in retail sales has already forced some retailers to the wall, with Made.com and Joules both filing for administration this month.

In October alone, sales picked up by 0.6% after a 1.5% tumble in September when many shops closed out of respect.

But compared to October 2021, people actually bought 6.1% less stuff – but had to spend 4.8% more to get it, due to inflation.

And compared to before the pandemic, retail sales are still down 0.6%.

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Commenting on today’s retail sales figures for October, ONS director of economic statistics Darren Morgan said: (1/2)

⬇️ pic.twitter.com/K9SIDpY4HP

&mdash; Office for National Statistics (ONS) (@ONS) November 18, 2022

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Commenting on today’s retail sales figures for October, ONS director of economic statistics Darren Morgan said: (1/2)

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— Office for National Statistics (ONS) (@ONS) November 18, 2022

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Darren Morgan added: (2/2)

pic.twitter.com/DlgUQbKvqN

&mdash; Office for National Statistics (ONS) (@ONS) November 18, 2022

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Darren Morgan added: (2/2)

pic.twitter.com/DlgUQbKvqN

— Office for National Statistics (ONS) (@ONS) November 18, 2022

Lynda Petherick, head of retail at Accenture in the UK & Ireland, says retailers face a difficult Christmas.

.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}“Despite Black Friday coming up next week, it’s unlikely that retailers will be in celebration mode as we head into the festive season this year.

Rising inflation and the fall in real wages will only be adding to the sense of unease over whether this will be a “golden quarter” after all.

Retailers and shoppers alike face more pain in the next few years, with households set for the steepest fall in living standards on record and the highest tax burden since the second world war.

The £30bn of spending cuts and £25bn of tax rises laid out yesterday by chancellor Jeremy Hunt will chill the economy, with record falls in living standards over the next two years that will wipe out eight years of growth.

And we’re in recession, according to the Office for Budget Responsibility, which forecasts GDP will actually shrink by 1.4% during 2023, and not regain pre-pandemic levels until late 2024.

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Friday’s @guardian front page: From bad to worse. https://t.co/OYnNHaB4k0 pic.twitter.com/p3vhSFkouX

&mdash; Pippa Crerar (@PippaCrerar) November 17, 2022

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Friday’s @guardian front page: From bad to worse. https://t.co/OYnNHaB4k0 pic.twitter.com/p3vhSFkouX

— Pippa Crerar (@PippaCrerar) November 17, 2022

In a sobering near-Budget, Hunt trimmed the budgets of Whitehall departments, broadened the scope of the windfall tax on energy companies, extended the freeze on tax allowances, reduced the threshold for paying the 45% rate of income tax to £125,100, gave local authorities the go-ahead to raise council tax, and raised more from capital gains tax and inheritance tax as part of a plan to convince the financial markets of the government’s intention to reduce its budget deficit.

But Hunt increased spending on the NHS and schools, and deferred most of his tough measures until 2024-25 and beyond, as he stressed the need to avoid a “doom loop” of rising taxes and lower growth.

The agenda

  • 7am GMT: UK retail sales for October

  • 8.30am GMT: ECB president Christine Lagarde gives keynote speech at Frankfurt European Banking Congress

  • 10.30am GMT: Institute for Fiscal Studies holds post Autumn Statement analysis event

  • 3pm GMT: US existing home sales for October