LONDON: British shoppers cut back on spending in the three months to December for the first time since last spring, adding to evidence of a consumer slowdown as Brexit approaches, data showed on Friday.
Retail sales volumes fell 0.2 percent in the fourth quarter after a 0.2 percent rise in the three months to November, the Office for National Statistics (ONS) said.
Friday’s data chimed with other signs that consumer spending is cooling after a strong summer.
Businesses are also cutting investment before Britain’s scheduled departure from the European Union in late March, leaving the overall economy growing at a snail’s pace.
In December alone, retail sales fell 0.9 percent, recoiling after November’s Black Friday splurges, but were 3.0 percent higher than a year earlier. Both readings were below economists’ forecasts in a Reuters poll.
“A major concern for retailers will be that already cautious consumers further limit their spending in the near term at least due to the heightened uncertainties over Brexit,” economist Howard Archer from the EY ITEM Club consultancy said.
Sterling and British government bonds were little changed after the data.
The ONS said the value of sales fell for the first time in three years in the three months to December, underlining a squeeze on retailers’ profit margins as they battle for customers.
A survey last week from the British Retail Consortium showed retailers failed to increase Christmas sales for the first time since the depths of the global financial crisis a decade ago.
Supermarkets Sainsbury’s and Morrison missed Christmas sales forecasts though Tesco beat them. Clothing retailer Next and department store John Lewis reported a late surge in demand.
The ONS data showed a drop in sales of carpets and floor coverings, possibly reflecting a stalling housing market.
While disarray over Brexit has weighed on consumer confidence, there has been some comfort for households recently with the fastest underlying pay growth since 2008 and inflation falling to an almost two-year low of 2.1 percent.
Highlighting the easing of inflation pressures, the ONS’s measure of annual price increases in stores cooled to 0.6 percent in December from 1.3 percent in November, the smallest uptick in more than two years.
UK shoppers rein in spending as Brexit nears
UK shoppers rein in spending as Brexit nears
- Retail sales volumes fell 0.2 percent in the fourth quarter after a 0.2 percent rise in the three months to November
- Businesses are also cutting investment before Britain’s scheduled departure from the EU in late March
Saudi Arabia’s economy to grow by 4.5% in 2026 on non-oil gains, report says
RIYADH: Saudi Arabia’s gross domestic product is expected to expand by 4.5 percent in 2026, outperforming the global growth average of 3.4 percent, according to a Standard Chartered Global Research analysis.
In its latest report, the firm said the robust outlook will be driven by sustained momentum in both the Kingdom’s hydrocarbon and non-oil sectors.
The forecast places the Kingdom’s growth above that of many major economies and broadly aligns with the International Monetary Fund’s October outlook, which projects Saudi Arabia’s GDP to expand by about 4 percent in both 2025 and 2026.
Mazen Bunyan, CEO of Standard Chartered, Saudi Arabia, said: “While the 2026 growth outlook for Saudi Arabia is strong, it comes with elevated downside risks to oil prices, a sector set to make a comeback in the next year.”
He added: “In this context, continued non-oil sector growth will ensure sustained financial stability whilst diversifying growth sources across the Kingdom.”
Strengthening the non-oil sector is a key objective of Saudi Arabia’s Vision 2030 agenda, as the Kingdom continues to reduce its long-standing reliance on crude revenues.
According to the report, Saudi Arabia’s hydrocarbon sector returned to growth this year after OPEC+ eased production cuts that had been in place since 2023.
The non-oil sector is also expected to expand steadily at 4.5 percent, supported by investment and consumption, and will continue to underpin economic growth.
Amid projections for twin deficits between 2026 and 2028, Standard Chartered expects Saudi Arabia’s public debt-to-GDP ratio to rise to 36 percent by the end of 2026, from 26 percent at the end of 2024, bringing it closer to the Kingdom’s self-imposed ceiling of 40 percent.
“Even so, Standard Chartered Global Research believes that recent fiscal deficits have not been a setback, but rather a catalyst for structural macroeconomic transformation,” said the report.
It added that policymakers are expected to continue diversifying funding sources in 2026, seeking to attract greater foreign direct investment alongside increased foreign participation in domestic debt markets.
“Increased capital flows are likely to support the Kingdom’s capital market momentum, notably thanks to greater inclusion in leading investment indices,” added the report.
