DISAPPOINTING DECEMBER FOR UK RETAILERS 

Retail sales grew by an annual rate of just 1.7 per cent in December, down from 2.7 per cent the previous month and below the 12-month average of 3.6 per cent, according to new data from the British Retail Consortium. The increase also lagged behind the 3.9 per cent inflation rate for November, suggesting households bought fewer goods despite spending more in nominal terms (Financial Times).  

“The festive period failed to make amends for a challenging year of sluggish retail sales growth, as weak consumer confidence continued to hold back spending,” Helen Dickinson, CEO of the British Retail Consortium, said. 

FINANCIAL SERVICES SECTOR CONTRACTS FOR FIRST TIME SINCE 2020 

The UK financial services sector contracted for the first time since June 2020 in the final quarter of last year, according to new data from the Confederation of British Industry (CBI). Business volumes were at -23 per cent, down from +27 per cent in the quarter to September, while firms expect volumes to be broadly flat next quarter (City AM). 

Louise Hellem, Chief Economist at the CBI, said: “With business volumes falling and both sentiment and profitability stagnating, 2023 ended on a flat note for financial services firms.”  

She said, however, that “it is encouraging to see that many businesses are still looking to grow their workforce and increase investment.” The survey showed firms plan to increase investment in IT and vehicles, plant and machinery in the next quarter, as well as increasing their headcount by an average rate of 32 per cent. 

NEWS IN BRIEF

Recruitment firm Hays has warned of a “clear slowdown” in global job markets, which it said was likely to lead to its half-year profits coming in lower than expected (City AM). 

Income tax revenues have leapt by more than 70 per cent since 2010, according to new analysis of HMRC figures by The Times.  

The EU has announced €4 billion of state aid investments in new factories producing electric batteries for cars, heat pumps and solar panels as it seeks to accelerate production and the uptake of green technologies (The Guardian). 

Higher interest rates add more than £10 billion a year to the likely cost of England’s student loan system, according to the Institute for Fiscal Studies (Financial Times).