Borrowing costs tumble as sales fall
Analysts warn that recession is on the cards
The Bank of England is increasingly expected to cut interest rates next year
OLI SCARFF/GETTY IMAGES
Government borrowing costs have fallen to their lowest level in six months as money markets bet that a sharp drop in retail sales will force the Bank of England to bring forward interest rate cuts.
The surprise 0.3 per cent contraction in the volume of goods sold in October — to the lowest level since the winter lockdown of 2021 — rekindled concerns that the economy may tip into recession early next year.
People spent less across the board, with the amount of petrol, clothes, groceries and household goods purchased all down. The slowdown was blamed on wet weather and the cost of living squeeze delaying the start of Christmas shopping.
The yield on the benchmark ten-year gilt, a proxy for the effective interest
