Data indicates that UK shoppers avoided physical retail areas during Black Friday, reflecting growing concerns about sluggish consumer activity potentially slowing economic expansion in 2026. According to MRI Software, foot traffic across shopping zones dropped by 2% on Friday and fell 7.2% compared to the same period last year, with only areas near central London offices seeing a rise in visitors. n nAlthough the majority of Black Friday transactions now occur online, performance across digital platforms was inconsistent in the lead-up to the weekend. IMRG, an online retail group, reported a significant drop in sales on Thursday, while Tuesday saw an uptick. n n”The ongoing pressure from the cost of living is clearly affecting consumer behavior,” noted Jenni Matthews of MRI. n nThe muted figures align with KPMG’s assessment that weak household expenditure will likely hinder economic momentum over the coming year. Despite most of the £26bn fiscal impact from Rachel Reeves’s budget not taking full effect until later, KPMG warns that financially stretched households will remain cautious, especially as unemployment climbs to 5.2%. n n”Growth prospects for 2026 remain limited, influenced by a weakening job market and subdued spending,” said Yael Selfin, KPMG’s chief economist, though she highlighted encouraging developments in sectors like green energy. She forecasted GDP growth of 1% in 2026 and 1.4% in 2027, adding that improvements could occur if housing planning rules are reformed and investor uncertainty declines. n nThis cautious outlook is echoed in two additional reports released Monday, both revealing pessimism among business leaders. The Confederation of British Industry’s services survey, conducted before the budget announcement, recorded the sharpest drop in business confidence in three years, with firms citing rising operational costs and uncertain demand. n n”Businesses anticipate minimal short-term improvement, as demand uncertainty and sustained cost pressures are expected to limit hiring and capital investment,” stated Charlotte Dendy from the CBI. n nMeanwhile, the Institute of Directors’ economic confidence index stood at -73 before Reeves’s budget, slightly improving to -72 afterward. Anna Leach, the IoD’s chief economist, explained that persistent speculation about tax hikes had suppressed sentiment, and with 80% of surveyed leaders viewing the budget negatively, confidence remains near historic lows. n nHospitality operators also warned of significant strain from upcoming business rates adjustments, which may force cutbacks in staffing and capital spending. They argued that the budget’s proposed safeguards, introduced as pandemic-era support ends, fail to counterbalance the surge in property valuations used for rate calculations. n nUnder the current system, many pubs face substantial increases in their rateable values next year—a key determinant in business rates—while numerous retailers see declines due to weaker high street performance. n nReeves announced in her budget speech that over 750,000 retail, hospitality, and leisure properties would benefit from permanently reduced tax rates, funded by higher levies on large retailers, particularly major online firms. n nHowever, Paul Crossman, chair of the Campaign for Pubs and operator of three York-based establishments, criticized the plan: “In most instances, rather than seeing the promised bill reductions, our members appear set to pay significantly more once current support ends in April.” n nAlex Reilley, head of the Loungers chain, noted a varied impact across locations due to differing classifications, but emphasized: “The majority of hospitality venues will face some level of increase, and for pubs, this could amount to an existential threat.” n nThe government plans to offer billions in transitional relief to ease the burden of rising business rates next year, though analysts argue this only postpones financial strain rather than resolving it. n— news from The Guardian n
— News Original —n(title) UK refrains from hitting high street on Black Friday as fears grow over economy n(content) Shoppers held back from visiting high streets over Black Friday, data shows, amid fears weak consumer spending will put the brakes on economic growth in 2026. n nVisitors to all UK shopping destinations were down 2% on Friday and 7.2% compared with the equivalent days last year, according to the monitoring company MRI Software, with locations near central London offices among the few to experience a lift in visits. n nWhile most Black Friday sales are now online, the picture there was also a mixed bag in the run-up to the big weekend. Sales down heavily on Thursday but up on Tuesday, according to the online retail association IMRG. n n”The cost of living squeeze appears to be weighing on overall activity,” said Jenni Matthews from MRI. n nThe lacklustre data came as the consultancy KPMG highlighted soft consumer spending as one factor likely to hold back the economy over the next 12 months. n nDespite the fact that most of the £26bn tax-raising impact of Rachel Reeves’s budget would not be felt until later, KPMG suggested cash-strapped households would continue to be cautious, as unemployment ticks up to 5.2%. n n”The outlook for growth in 2026 is subdued, reflecting the impact of a cooling labour market and weak household spending,” said KPMG’s chief economist, Yael Selfin, although she pointed to positive “pockets”, including green energy. n n”The medium-term picture could improve further if planning reforms unlock housing delivery and uncertainty reduces for investors,” she added, predicting GDP growth of 1% for 2026 and 1.4% for 2027. n nThis gloomy outlook chimes with two other reports published on Monday, both underlining the downbeat mood among business leaders. n nThe Confederation of British Industry’s services sector survey, carried out before the budget, showed the fastest decline in optimism about the general business situation for three years, with companies citing rising costs and uncertainty about future demand. n n”Looking ahead, businesses expect little near-term relief, with uncertainty about demand and persistent cost pressures set to constrain future hiring and investment plans,” said the CBI’s Charlotte Dendy. n nSeparately, the Institute of Directors said its economic confidence index, based on a survey of business leaders, was at a near record low of -73 in the run-up to Reeves’s budget, and improved by a whisker to -72 afterwards. n nAnna Leach, the IoD’s chief economist, said: “In the weeks running up to the budget, persistent speculation over tax rises kept confidence subdued. And with our snap poll showing that four in five business leaders (80%) view the budget negatively, it is no surprise that confidence remains close to record lows afterwards.” n nSeparately, hospitality businesses said they would take a big hit from business rates changes, forcing them to rein in investment and hiring. They said measures announced in the budget to protect businesses, as Covid-era support comes to an end, were not enough to offset rises linked to the increase in rateable value of their properties. n nUnder the complex tax system, for many pubs in particular there will be a big increase next year in their rateable value – a key part of the business rates calculation. This is in contrast to many retailers whose rateable value will fall because of poorer trade on high streets. n nIn her budget speech, Reeves announced that she was introducing “permanently lower tax rates for over 750,000 retail, hospitality and leisure properties”, paid for with higher rates on the biggest retailers, including big online companies. n nHowever, Paul Crossman, the chair of the Campaign for Pubs and the licensee of three pubs in York, said: “In the vast majority of cases it seems that instead of the promised reduction in our bills [our members] will be expected to pay more, in many cases vastly more, once the existing support finishes next April.” n nAlex Reilley, the head of the Loungers chain, said for his business there was a mixed picture because some sites were not categorised as pubs, but he added: “Most [hospitality] businesses will be looking at an increase of some description and for our pub sector it could quite easily be an extinction event.” n nThe government has said it will provide billions of pounds in “transitional relief” to support those hit by big increases in business rates next year but analysts have dismissed this as merely delaying the pain.