The UK Spring Forecast has highlighted a fragile economic outlook and rising cost pressures for the retail sector, according to the British Retail Consortium (BRC). The industry body said the latest projections show weak growth, rising unemployment and mounting operating costs that could affect jobs and investment across UK retail.
Responding to the government’s economic update, BRC chief executive Helen Dickinson said the figures “underline the scale of the economic challenge” facing businesses and workers. She noted that “growth is fragile, unemployment has climbed to 5.2% and is expected to rise, and businesses are cutting back.”
The Spring Forecast follows the government’s economic statement delivered by Chancellor Rachel Reeves and updated projections from the Office for Budget Responsibility (OBR).
The watchdog has lowered UK growth expectations for 2026 to around 1.1%, reflecting continuing economic uncertainty.
Economic data included in the Spring Forecast points to a cautious outlook for UK businesses. The BRC highlighted concerns about weakening labour market conditions and declining business confidence.
Dickinson said the immediate concern is employment across sectors such as retail. “While household finances may improve later in the Parliament, the immediate risk is to jobs, especially in retail,” she stated, adding that job vacancies are already falling while confidence remains weak.
Retail is one of the UK’s largest private sector employers, supporting millions of jobs nationwide. Recent surveys indicate retailers are already adjusting operations as economic conditions tighten. Rising labour costs and cautious consumer spending have led some businesses to reduce hiring or review staffing levels.
The sector has also faced structural changes, including automation and competition from online marketplaces, which have contributed to job losses in recent years.
One of the main pressures highlighted by the BRC is the sharp increase in employment costs facing retailers. According to the organisation, labour expenses rose by more than £5bn in the past year.
“Retailers face a cost of doing business crisis,” Dickinson said, pointing to increased wage bills and higher employer contributions as key drivers of cost inflation.
She also warned that new regulations could add further pressure if not implemented carefully. “Poorly implemented reforms in the Employment Rights Act risk adding further cost and complexity at the worst possible moment,” she said, adding that policy changes should “raise standards without deterring hiring.”
