With autumn now fully underway, there’s been lots of news and updates over October in the world of business and tax!

Here’s all the news from the past month…

Wages Overtake Inflation

ONS data has revealed that wages have risen at an annual rate of 7.8% between June and August, higher than average inflation over the same three months, meaning wages have started to outpace prices for the first time since October 2021 – signalling the slight ease in the cost-of-living crisis for some.

However, the gap between public and private sector pay remains, with wage growth for public sector workers reaching 6.8% between June and August.

Retail Sales Have Fallen

In September, retail sales saw an unexpected fall due to cost-of-living pressures and the El Niño weather event that happened at the start of September. Figures saw a sales volume fall of 0.9%, and a 1.9% fall overall at non-food stores. Consumer confidence is also reported to have fallen in October.

AJ Bell’s Head of Financial Analysis Danni Hewson said “every retailer will be fully focused on the festive season. The next three months are the most important of the year for the sector, the time when people splash out on gifts for friends and family, so the fact that consumers tightened their belts in September will undoubtedly be cause for concern.”

Rise In Real Living Wage

The voluntary ‘Real Living Wage’ has risen to £12 an hour (or £13.15 for those in London). Over 460,000 workers aged 18 and over will benefit from the scheme, to help ease the pressure of the current cost-of-living crisis.

The rise in the ‘Real Living Wage’ came into effect on October 24th, although employers will have 6 months to implement the scheme.

The Living Wage Foundation have said the rise in rates will mean that a full-time employee that works for a business that’s part of the scheme will earn £3,081 a year more than someone on the current government minimum, or, for those in London, £5,323 more.

Government Borrowing Lower Than Expected

Official Figures have shown that public sector net borrowing in the six months to the end of September was £19.8bn below the forecast made by the Office for Budget Responsibility in March.

In September, net borrowing came in at £14.3bn, which was £1.6bn lower than September 2022 and below city economists’ estimations.

UK Inflation Remains The Same

The inflation rate remained at 6.7% over the course of September, meaning prices are still rising at the same rate as they were in August, although food and non-alcoholic drink prices have fallen for the first time since September 2021.

Petrol and Diesel however continued to rise compared to September 2022, with the cost of this keeping inflation from falling further. Chancellor Jeremy Hunt has pledged to get inflation to fall to 5% by the end of the year, saying “As we have seen across other G7 countries, inflation rarely falls in a straight line, but if we stick to our plan then we still expect it to keep falling this year. [This] news just shows this is even more important so we can ease the pressure on families and businesses.”

Liverpool See’s Support For Digital, Tech & Creative Businesses

Over in Liverpool, Mayor Steve Rotheram has announced a £900k boost to Digital, Tech and Creative businesses in the second phase of their job creating scheme.

The new funding will support 120 companies, and comes after the first £3.5m wave created over 300 jobs at 178 SME’s in the same sector, which has a collective net turnover increase of £18m.

Mayor Steve Rotheram said of the current plans: “Our area is home to a burgeoning digital, tech and creative sector that supports thousands of local jobs and training opportunities. Through Gather, we’re helping the industry to strengthen the future of its workforce and create quality, secure, and well-paid jobs. We’ve launched our next round of support to ensure that even more businesses and local people can benefit and take advantage of all the opportunities that will come our way in an increasingly digital world.”

GDP Figures Reveal Economy Growth

The economy grew by 0.2% in August, recent figures have shown, with Pantheon Macroeconomics saying that August’s GDP report should “becalm fears that the economy is on the cusp of recession”.

The ONS did however revise July’s GDP figures, reporting they had fallen by 0.6%, rather than the initially reported 0.5%.

That’s all for October! We can expect the Autumn budget on November 22nd , so remember to keep an eye out for that.

Have a great November!