UK Consumer Spending Growth Slows Ahead of Budget and Rising Energy Costs
LONDON, Oct 14 – British consumer spending showed its slowest growth in four months in September, as uncertainty over the upcoming budget and higher energy bills weighed on shoppers, according to a survey released Tuesday.
The British Retail Consortium (BRC) reported that shop sales increased by 2.3% year-on-year, down from 3.1% in August, marking the weakest rise since May. Meanwhile, broader data from Barclays indicated a decline in overall consumer spending during the month.
“Rising inflation and a potentially taxing budget is weighing on the minds of many households planning their Christmas spending,” said Helen Dickinson, BRC Chief Executive. She noted that retailers are also facing difficult decisions on investment and hiring during the crucial Golden Quarter, given uncertainty over business rates bills due in April.
Last year’s tax increases announced by Finance Minister Rachel Reeves largely affected businesses, but consumers are now feeling the impact of a 2% rise in energy prices this month.
Barclays’ data, based on debit and credit card transactions between August 23 and September 26, showed overall spending fell 0.7% year-on-year, following a 0.5% increase in August. Spending on essential items dropped 2.6%, marking the fifth consecutive monthly decline, while growth in non-essential purchases slowed to 0.2%, the weakest in 15 months.
Despite the slowdown, Barclays reported that household confidence hit a four-year high at 78%, with sentiment around personal finances at a seven-month peak as wages continued to outpace inflation. However, nearly half of consumers surveyed said they were adjusting their spending ahead of next month’s budget, and one-third of those respondents were focusing on building savings.
The BRC figures, which cover sales from August 31 to October 4, highlight the caution creeping into UK shopping patterns as households balance rising costs with holiday spending plans.
