UK Economy Shows Surprising Resilience Amid Budget Concerns

Recent data reveals British businesses are showing signs of recovery with a rise in consumer spending and sales, easing tax fears. Finance minister Rachel Reeves faces a crucial budget in November, with potential tax hikes expected. Inflation remains stable while economic growth does not fully benefit struggling households.

Recent data indicates a potential turning point for British businesses, with consumer spending unexpectedly increasing last month. This trend, along with positive service and manufacturing sector metrics, brings favorable news for finance minister Rachel Reeves ahead of the forthcoming budget announcement.

Despite employers' cautious approach concerning spending and hiring, retail sales surprisingly rose by 0.5% in September against predictions of a decline. The demand for new iPhones and gold from online jewellers contributed significantly to this uptick.

While the broader economic growth remains insufficient to alleviate the high cost of living for many households, positive indicators such as steady inflation and a drop in borrowing costs provide a more optimistic setting for the upcoming budget proposal. Economists suggest these developments might prompt an interest rate cut by the Bank of England in the near future.

(With inputs from agencies.)