LONDON — British consumer spending grew last month at a rate that lagged behind inflation by a long way, according to surveys on Tuesday that underlined 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.
Financial Post Top Stories
Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300
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.
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.
“As consumer confidence continued to fall, people shopped cautiously, avoiding large ticket items such as new computers, TVs and furniture,” she added
The GfK index of consumer confidence fell last month to its lowest level since records began in the mid-1970s. (Reporting by Andy Bruce; editing by David Milliken)