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British retail sales tumbled in October and a closely watched gauge of household sentiment fell this month, adding to signs of waning consumer spending ahead of finance minister Rachel Reeves' budget next week.

Retail sales volumes fell by 1.1% in October compared with a month before, their first month-on-month fall since May, the Office for National Statistics said on Friday.

Economists polled by Reuters had expected sales to be flat compared with the previous month. Compared with October a year ago, retail sales were just 0.2% higher, against forecasts for a 1.5% annual increase.

Sterling fell briefly against the dollar but soon recovered.

Earlier on Friday, Britain's longest-running consumer survey, from GfK, showed a broad-based drop in consumer morale this month which suggested the public was "bracing for bad news" in Reeves' budget on Nov 26.

"The increasingly chaotic run-up to the budget has begun to weigh on consumer spending, judging by confidence nudging down in November and weakening retail sales growth lately," said Rob Wood, chief UK economist at Pantheon Macroeconomics, a consultancy.

Separate ONS data showed higher-than-expected government borrowing last month, underscoring the scale of the challenge facing Reeves.

She is expected to need to raise £20-30 billion (US$26 billion-US$39 billion or RM107.7 billion-RM161.6 billion) through higher taxes due to an expected growth downgrade from the government's budget watchdog as well as higher borrowing costs and an inability to pass planned welfare cuts through parliament.

Overall consumer spending has been subdued due to a continued high savings rate, which economists say may reflect a surge in inflation in 2022, a more recent weakening in the jobs market and concerns about tax rises in the budget.

Recent updates from major retailers have expressed nervousness about the impact of the upcoming budget on consumer sentiment, particularly for more discretionary purchases. However, supermarket Sainsbury's and food and clothing retailer Marks & Spencer were both upbeat on Christmas trading prospects.

The ONS said supermarket, clothing and mail order sales fell in October, with some retailers citing consumers delaying spending ahead of November's Black Friday discounts.

British retail sales volumes remain 3.3% lower than their pre-pandemic level of February 2020.

Source: Theedgemarkets

Sales at UK retailers slumped unexpectedly last month as shoppers waited for Black Friday deals, and uncertainty over the upcoming budget dampened consumer confidence.

Retail sales fell 1.1% month on month in October, the first fall since May, according to official figures from the Office for National Statistics (ONS). Economists had been expecting sales growth to be flat on the previous month.

Supermarkets, clothing stores and online mail order companies suffered sales declines, which some retailers said was due to consumers delaying purchases in the run-up to the annual Black Friday sales, according to the ONS.

Clothing, footwear and textile stores posted a 3.3% month-on-month drop in sales, the largest fall, after strong summer when shoppers were motivated to buy clothes during warm weather and sporting events improved consumers' mood.

Supermarkets recorded a sales decrease of 1.1% in October, the second consecutive monthly fall.

Online retail sales fell 1.7% month on month, while fuel sales dropped 2.4% in October compared with September.

Some analysts also attributed the surprise fall in sales in October to consumer jitters over the upcoming budget, which the chancellor, Rachel Reeves, will present next week.

"The uncertainty surrounding what the chancellor's budget next week will mean for individuals is only further dampening consumer confidence and spending intentions," said Rajeev Shaunak, the head of consumer at the accountancy and advisory firm MHA.

"The Christmas trading period will be critical, and early sales indicators are expected to confirm that consumer demand remains sluggish, creating a perfect storm for retailers."

On Friday, the research company GfK released data showing that consumer confidence has fallen on every measure of its index this month.

GFK's five sub-indexes record public opinion about people's personal financial situation, propensity to make big purchases and the UK's general economic situation.

The company recorded drops across all five sub-indexes compared with October, resulting in a two-point fall in overall confidence to -19.

The latest monthly survey, which dates back to 1974, showed particular anxiety among earners on salaries between £35,000 and £49,999, with substantial falls in their expectations for their own financial situation and future spending.

"This is a bleak set of results as we head towards next week's budget," said Neil Bellamy, the consumer insights director at GfK. "The public is bracing for difficult news, with little in the current climate to lift expectations."

The ONS revised retail sales for September up from 0.5% to 0.7%, but said August had been revised down from 0.6% to 0.5% growth.

Overall, retail sales remain 3.3% down compared with their pre-pandemic level from February 2020.

Source: GUARDIAN

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Today, the Hong Kong stock index HSI is showing downward momentum, dropping below 25,200 for the first time since mid-October.

Factors adding to selling pressure include (according to media reports):

→ Tech sector slump: Hong Kong is following the US, where investors have started offloading tech giants' shares amid fears of an AI "bubble." Market participants worry that current company valuations are overinflated. Even Nvidia's strong report released this week only provided a short-term boost.

→ Geopolitics: In addition to strained trade relations between China and the US, tensions with Japan have added to uncertainty.

→ China's economic data: Indicators continue to raise concerns despite government stimulus measures.

Technical analysis of the HSI (Hong Kong 50 on FXOpen) shows that price action since late summer 2025 formed an upward channel (marked in blue).

At the same time:

→ on 5 November, the price rebounded sharply from the lower boundary, confirming strong buying interest;

→ this week (as indicated by the arrow), it failed to reverse upwards.

As a result, bears have pushed through an important support level and are attempting to consolidate their gains.

It is possible that:

→ the 25,700 level (where the channel was broken) may act as resistance;

→ bears may grow more ambitious, potentially driving the HSI (Hong Kong 50 on FXOpen) down to test key support around 24,800 in the near term.

Source: FXOpen

XAUUSD prices have fallen towards the 4,030 USD area following the release of US labour market data.

XAUUSD forecast: key trading points

Fundamental analysis

On Friday, XAUUSD prices are declining amid weakening expectations of a Federal Reserve rate cut in December after the release of the employment report.

The long-awaited report from the US Department of Labor, delayed due to the government shutdown, showed that the number of nonfarm jobs increased by 119 thousand in September, exceeding the forecast of 50 thousand.

Analysts note that these figures confirm the Fed's October assessment that the labour market is cooling but remains stable. Meanwhile, the unemployment rate rose to 4.4%, the highest level since October 2021, surpassing the expected 4.3%, while wage growth came in slightly above forecasts at 3.8%.

XAUUSD technical analysis

XAUUSD quotes corrected towards the area around 4,030 USD amid growing doubts about a further Federal Reserve rate cut this year. The Alligator indicator is pointing downwards, meaning the corrective movement may continue.

The short-term XAUUSD price forecast suggests further growth towards 4,100 USD and higher if buyers regain control and find a foothold above 4,050 USD. Conversely, if sellers keep prices below 4,050 USD, a decline towards the 4,000 USD support level is possible.

Summary

Gold continues its downward correction, dropping to the 4,030 USD area as market participants doubt the Fed will cut rates at the December meeting.

Source: RoboForex

Gold slipped on Friday and was heading for a weekly drop, as a stronger-than-expected US jobs report reinforced expectations that the Federal Reserve would refrain from cutting interest rates at its December meeting.

Spot gold fell 0.9% to US$4,039.86 per ounce, as of 0643 GMT. Bullion has dipped 1% this week. US gold futures for December delivery dipped 0.6% to US$4,035.60 per ounce.

"Gold prices are consolidating at the moment, and we see the dollar has strengthened quite a bit, and behind it, there is a lot of speculation whether the Fed will continue to cut interest rates or not," GoldSilver Central MD Brian Lan said.

"I think now the market is unsure, and especially, now, when we are going to the end of December, we expect a lot of traders will be taking profit off their positions, and that's what we saw at the end of last week to this week."

The dollar was on track on Friday for its strongest week in more than a month. A stronger dollar makes greenback-priced gold more expensive for holders of other currencies.

The closely watched US Labor Department report, delayed by the federal government shutdown, showed that September non-farm payrolls increased by 119,000, more than double the estimated increase of 50,000.

Traders now see nearly a 39% chance for a Fed rate cut next month. Gold, a non-yielding asset, tends to do well in low-interest-rate environments.

Chicago Fed president Austan Goolsbee repeated on Thursday he is "uneasy" about frontloading rate cuts, particularly with progress on inflation towards the Fed's 2% goal looking to have stalled and starting to go the wrong way.

Meanwhile, physical gold demand across major Asian markets remained weak this week, as volatility in rates deterred potential buyers from making purchases.

Elsewhere, spot silver slipped 2.2% to US$49.48 per ounce, platinum fell 0.4% to US$1,505.96, and palladium dipped 1.4% to US$1,358.15.

Source: Theedgemarkets