‘Difficult’ decisions for Hunt | Sun lifts retailers
Following the fall in inflation and the Bank of England’s decision to hold interest rates, attention switches to whether the BoE raises the rate at its November meeting, and the Chancellor Jeremy Hunt’s Autumn statement.
Mr Hunt said tax cuts are “virtually impossible” despite the Government borrowing less-than-expected this year.
In an interview with LBC, the Chancellor said he faces difficult decisions.
Commenting on the lack of fiscal headroom he expects to have, Mr Hunt said: “It makes life extremely difficult, it makes tax cuts virtually impossible and it means that I will have another set of, frankly, very difficult decisions.”
His comments came as Mr Hunt faces pressure to cut taxes after the Government borrowed £11.4bn less than expected so far this financial year.
Better weather last month helped lift retail sales following the dreich July that drove shoppers away from high streets.
New data from the Office for National Statistics (ONS) shows a 0.4% rise in sales in August – 0.6% when the effects of fuel sales are excluded.
The recovery followed a 1.1% decline in July (revised from 1.2%) compared to the previous month.
The August figure was slightly below City hopes for a rise of 0.5%. On a three-month view to August, retail sales rose by 0.3% when compared with the previous three months.
The latest ONS retail figures coincide with a survey showing an uplift in consumer confidence.
The GfK index showed a four point improvement for September and came ahead of this week’s fall in inflation and the Bank of England’s decision to hold interest rates.
Joe Staton, client strategy director, said: “With less than 100 shopping days to Christmas, the four-point boost to the major purchase measure might offer some hope to retailers, who know all too well that many people face financial pressure in the run-up to this year’s festive season.”
London ekes out rise
London’s FTSE 100 index eked out a 5.3 point, or 0.1%, gain to 7,683.91, leaving the index down 27.47 points, or 0.4% on the week.
Banks continued to benefit from the interest rate decision. Lloyds Banking Group rose 1p, or 2.1%, to 45.25p.
Ocado, which lost nearly a fifth of its value on Thursday after a broker downgrade, rose 43.5p, or 6.7%, to 691.25p.
JD Sports Fashion extended gains by 2p, or 1.5%, to 147p, while the jump in oil prices lifted BP 5.25p, or 1%, to 525¾p.