November is a key month in the Golden Quarter for retailers but these figures aren’t exactly sparkling. While retailers will welcome any pickup in trading, November’s sales were weaker than expected – economists had forecast a 0.5% rise.
Sales rose at supermarkets and other non-food stores but there was a drop in takings at clothing retailers.
The UK government borrowed almost £11.25bn last month, the lowest November figure in three years, helped by a rise in tax receipts and a drop in interest payments on the national debt.
The ONS reports that public sector net borrowing was £3.4bn lower than in November 2023 – lower than the £13bn expected.
Happily for the Treasury, the interest bill on central government debt more than halved to £3bn in November; that is £4.7bn less than in November 2023 and the lowest November figure for five years.
The drop was due to the recent fall in the RPI inflation measure, which is used to set the interest rate on many government gilts.
“Christmas has come early” for the chancellor, Rachel Reeves, with borrowing undershooting expectations in November.
So says Ruth Gregory, the deputy chief UK economist at the City consultancy Capital Economics, who told clients: "Not only was borrowing (on the PSNB ex banks measure) of £11.2bn well below the consensus forecast of £13bn, but it was £3.4bn lower than in November 2023 and the lowest November borrowing in three years.
"The breakdown revealed that £2.4bn higher spending on public sector pay left total current expenditure in the year to date £17.7bn higher than at the same stage last year. But due to the recent strength in wage growth and fixed personal tax thresholds, total tax receipts were £3.2bn higher than in November 2023."
But while borrowing dipped to just over £11bn last month, the recent weakening of the economy – and the rise in market interest rates – could make it hard for Reeves to bring the deficit down as quickly as planned.
The agenda
• 10.30am GMT: Bank of Russia’s interest rate decision • 1.30pm GMT: US PCE inflation measure for November • 3pm GMT: University of Michigan survey of US consumer confidence
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