Sainsbury’s chief executive, Simon Roberts, has raised concerns that uncertainty surrounding potential tax increases is discouraging consumers from making significant purchases.
With Labour’s shadow Chancellor, Rachel Reeves, preparing her first Budget, which is expected to address the £22bn public finance gap, households are holding back amid fears of higher taxes.
Mr Roberts emphasised that customers were displaying increased caution in their spending, particularly on non-essential items, as they awaited more information on the Chancellor’s upcoming fiscal plans. He stated, “Households are inevitably seeking clarity about what’s going to happen next,” adding that greater transparency would be essential in restoring consumer confidence.
Ms Reeves is widely expected to introduce tax hikes in her forthcoming Budget, with speculation around possible increases in inheritance tax, capital gains tax, and reductions in tax relief for pension contributions. This uncertainty is contributing to a “continued caution in discretionary spending,” according to Mr Roberts, which is affecting sales of larger, non-essential goods.
In addition to calling for clarity on tax policies, Roberts stressed the importance of reducing mortgage costs to alleviate the financial strain on consumers. “We need to see interest rates continue to come down because that directly impacts household spending. I think clarity in the Budget, one way or another, is helpful,” he said.
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