‘Idiotic timing’ of Budget dents gross sales on High Street: Retailers brace themselves for a depressing Christmas

The High Street is reeling from the ‘idiotic timing’ of the Budget as well as ‘a very mild autumn’, a leading City broker has warned.

In a report for clients, Shore Capital said the Chancellor’s late November statement has ‘negatively impacted consumer sentiment and spending’.

Shore Capital analyst Clive Black also warned: ‘The UK rag trade has not been blessed by favourable autumn weather.

‘While there has been the odd frosty morning, it has, in the main, been a very mild autumn, which is not especially conducive to the sale of high-ticket items such as outerwear and boots.’

The report will fuel fears of a bleak Christmas on the High Street as the economy flounders, with unemployment surging from 4.1 per cent to a four-year high of 5 per cent since the election in July last year. 

While there is no set date for Budgets to take place, Rachel Reeves’s latest update came on November 26, far later than is often the case.

High Street blues: In a report for clients, Shore Capital said the Chancellor’s late November statement has ‘negatively impacted consumer sentiment and spending’

Critics claim that a prolonged period of speculation over tax rises ahead of the Budget hit household spending, investment and hiring among businesses. 

Households and businesses are now coming to terms with the £26billion of tax hikes she announced, including raids on income, savings and pensions.

Analysts are now warning that all of this will affect Christmas trading.

‘Who would have thought that the Chancellor of the Exchequer could also notably influence retail markets in the UK? 

The idiotic timing of her Budget, and the incompetent process to its delivery, undoubtedly negatively impacted consumer sentiment and spending,’ said Black, who is head of consumer research at Shore Capital.

Analysts at Deutsche Bank also expressed caution, saying it would be better to buy shares in retailers ‘with European and Rest of World sales exposure compared to the UK given a relatively subdued outlook for GDP and real household income in the UK’.

Households and businesses are pinning their hopes on a pre-Christmas interest rate cut by the Bank of England next week.

The Bank has cut rates five times since August last year, to 4 per cent, and is widely expected to lower them again – to 3.75 per cent on Thursday.

Investors are betting on one or two more cuts next year.