UK Consumer Spending Lags Far Behind Inflation, Says BRC, Barclaycard

By Steve Wynne-Jones
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UK Consumer Spending Lags Far Behind Inflation, Says BRC, Barclaycard

British consumer spending grew last month at a rate that lagged behind inflation by a long way, according to new surveys that underline the risk of recession as the cost-of-living crisis rumbles on.

Barclaycard said spending on its credit and debit cards rose 1.8% year-on-year in September, the weakest reading since February 2021 and far behind the annual 9.9% increase in consumer prices in August.

Nine out of ten people surveyed by Barclaycard from Sept. 23-26 said they were concerned by rising household energy bills.

"Energy price increases are understandably causing concern for Brits, as they worry whether they will have enough money to cover their household bills," said Esme Harwood, director at Barclaycard.

She said consumers were cutting back on discretionary spending, with a knock-on effect for hospitality and retail.


British Retail Consortium

Separate data from the British Retail Consortium (BRC), covering spending in shops only, showed a 2.2% annual increase in sales after a 1.0% increase in August, driven by expenditure on food.

"While UK retail sales grew in September, this represented another month of falling sales volumes given high levels of inflation," said Helen Dickinson, the BRC's chief executive.

Over the three months to September, food sales increased 4.6% on a total basis and 4.2% on a like-for-like basis, the BRC said. This is above the 12-month total average growth of 1.1%.

'Difficult' Winter Ahead

“A difficult winter looms for both retailers and consumers. Costs are increasing throughout retailers’ supply chain, the pound remains weak, interest rates are rising, and a tight labour market is pushing up the cost of hiring," Dickinson added.


"All of this is making it harder for retailers to reduce prices and help struggling households."

News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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