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Brexit hit to UK meals costs pushes up spending in January – BRC retailers group

LONDON, Feb 6 (Reuters) – Britain’s customers carried on spending extra on meals in January, reflecting the rise in inflation for the reason that Brexit vote, whereas they once more reduce on non-essential purchases, a survey confirmed on Tuesday.

The sum of money spent with retailers in January rose by zero.6 % in contrast with a 12 months earlier, matching progress in December and November, the British Retail Consortium (BRC) stated.

The figures have been on a like-for-like foundation, which strips out adjustments in retailer dimension.

“Rising food prices continued to inflate sales growth and absorb the lion’s share of shoppers’ squeezed budgets, while sales of non-food items struggled in January,” BRC Chief Executive Helen Dickinson stated.

Non-food gross sales fell 1.2 % over the three months to January, a smaller fall than within the three months to December. Over a 12-month interval non-food gross sales confirmed their first annual decline in 9 years.

“The going remains bumpy as consumers are still seeing wages fall in real terms,” Dickinson stated. “Although inflation will ease a bit this year these pressures will remain.”

Britain’s inflation price was pushed up by the autumn within the pound after the 2016 Brexit vote and hit a virtually six-year excessive of three.1 % in November. The Bank of England expects that to show a peak and is hoping that wage progress will catch up quickly.

Consumers are the principle drivers of Britain’s financial system which is rising extra slowly than many different wealthy economies.

Payments agency Barclaycard painted an identical image to the BRC on Tuesday, saying its card customers upped the tempo of spending on necessities in January whereas will increase in spending on non-essentials slowed.

Overall spending rose by an annual three.9 %, a contact slower than December’s enhance of four.zero % and pushed by the strongest enhance in grocery store spending in seven months which was up four.four %.

Barclaycard Managing Director Paul Lockstone stated January’s rise in general spending represented a powerful begin to 2018.

“But faltering confidence levels across the board suggests that consumers are feeling the effects of a post-Christmas slump, as well as the wider impact of inflation, on their everyday lives,” Lockstone stated.

Reporting by William Schomberg, enhancing by Andy Bruce

Our Standards:The Thomson Reuters Trust Principles.

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