The UK’s Post-Pandemic Tax Hikes Have Already Started To Bite

The UK’s Post-Pandemic Tax Hikes Have Already Started To Bite
Carl Hazeley

over 1 year ago1 min

UK retail sales data out on Friday was a dreary picture to behold: Brits bought less in May than in April (blue line), but they were spending more for the privilege (black line). This data is especially notable because it’s the first to fully reflect the impact of a tax hike rolled out in April, with workers’ pay packets feeling a little lighter when they were paid toward the end of the month. That makes a tense situation – one in which the country’s inflation is already at its highest in 40 years – even worse.

Don’t expect a let-up either: sales seem unlikely to rebound this month, with a recent survey suggesting that shoppers have bought even less again this month. And since retail sales are such an important engine of the UK economy, that’s going to weigh heavily on the country’s growth going forward.

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