UK consumer spending lags far behind inflation, surveys show

LONDON, Oct 11 (Reuters) – British consumer spending rose last month at a rate well below inflation, according to surveys on Tuesday highlighting the risk of recession as the cost of living crisis continues .

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 9.9% annual increase in prices at consumption in August.

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

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“Rises in energy prices are naturally worrying Britons, as they worry about whether they will have enough money to cover their household bills,” said Esme Harwood, director of Barclaycard.

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

Separate data from the British Retail Consortium (BRC), covering in-store spending only, showed an annual increase in sales of 2.2% after a 1.0% increase in August, led by food spending.

“While UK retail sales rose in September, it represented another month of declining sales volumes given high levels of inflation,” said BRC chief executive Helen Dickinson.

“As consumer confidence continued to decline, people were shopping cautiously, avoiding large items such as new computers, televisions and furniture,” she added.

The GfK index of consumer confidence fell last month to its lowest level since records began in the mid-1970s.

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Reporting by Andy Bruce; edited by David Milliken

Our standards: The Thomson Reuters Trust Principles.

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