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The growing weakness of British consumer spending pressured the retail sector, while expectations of higher interest rates increased fears of Britain entering an inevitable recession.
Most economists expect, as reported by the British newspaper The Independent, to increase interest rates in Britain from 3.5 to 4 percent during the British Monetary Policy Committee meeting next Thursday, and the Bank of England, the “Central Bank of Britain,” is expected to raise interest rates, in a move that analysts believe will increase. One of the pressures on borrowers who are already suffering.
And the Bank of England continues to raise interest rates in succession for more than a year, because the basic interest rate was only 0.1 percent in December 2021, as monetary policymakers were trying to encourage consumer spending after the Corona virus slowed down the rate of economic growth, according to the newspaper, which indicated that The efforts aimed at controlling inflation and returning its rate to the target level by the Bank of England, amounting to two percent, prompted the bank to tighten its monetary policy.
Meanwhile, economic analysts confirmed that the British consumer economy is waiting for the spending power that has accumulated during the Corona pandemic, while the Confederation of British Industry indicated that retail sales volumes declined over the past month at their fastest pace since April 2022.
Martin Sartorius, senior economist at the Union, warned that the British retail sector is still facing two headwinds represented by increasing costs and shrinking household incomes, while The Independent explained that the problem of the retail sector is that the confidence of British consumers is still in decline.
It is expected that more than a million workers in the British public sector will stop performing their jobs this week, in protest at their wages that do not keep pace with inflation, which rose to its highest level in 41 years last year.
Basma Kannon
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