Philip Hammond Calls Labour Party Economic Policy a ‘Back To The Future Socialist Fantasy’
Reuters

Philip Hammond has been urged to deliver a "Budget for shoppers" next month, amid growing concerns the UK economy is experiencing a slowdown.

The Chancellor will present the first ever Autumn Budget to fellow MPs on 22 November and two prominent lobby groups have called for him to ensure businesses were protected against rising costs, which could otherwise be passed onto already struggling consumers.

From April next year, business rates are expected to rise by £270m, but the Business Retail Consortium (BRC) has urged the Chancellor to suspend the planned increase, which would allow companies to invest towards keeping prices down.

The British Chamber of Commerce (BCC) has taken a similar stance on the proposed business rates rise, suggesting the government should focus on encouraging investments instead.

"Action to slash the up-front costs faced by business, to incentivise investment, and to improve mobile coverage and infrastructure would lead to a real boost to productivity, wages and trade," said the BCC director general Adam Marshall.

"A Budget that prioritises goodies and giveaways rather than future-proofing the economy would be a dereliction of duty by the government as a whole."

Data released on Thursday (19 October) showed UK retail sales fell more than expected in September as Britons reined in their spending, with quarterly growth falling to a four-year low. Also last week, the Office for National Statistics warned wages continued to lag behind inflation, which jumped to the highest level since April 2012 la st month.

Average weekly earnings rose by 2.2% year-on-year, in line with the gain recorded in the previous month and slightly above the 2.1% figure analysts expected.

Earnings excluding bonuses, meanwhile, held steady at 2.1%, marginally above the 2% forecast. However, when the impact of inflation is factored in, real weekly wages fell by 0.3%, when including bonuses and by 0.4% when excluding bonuses, compared with a year earlier.

The Bank of England is widely expect to hike interest rates, for the first time in a decade, at its next meeting on 2 November.

However, while higher interest rates would come as a boost to the pound, they could spell troubles for borrowers at a time when consumer credit, which covers personal loans, credit cards and borrowing for cars, is rising at just under 10% a year.

Both lobby groups, however, insisted the current spending squeeze facing households could be alleviated by not raising income taxes and speeding up increases in personal allowances.

Meanwhile, the BCC joined Britain's other four biggest business lobby groups in warning Brexit Secretary David Davis that time is running out to strike a transition agreement with the European Union, as companies push ahead with plans to shift jobs out of the UK.

In a joint letter that is expected to be delivered to Davis this week, the groups, which include the Confederation of British Industry and the manufacturing body EEF, called for a two-year Brexit transition agreement to be struck that closely resembles the current UK relationship with the EU.