LONDON (Reuters) – British shoppers turned extra cautious about their spending in September after occurring a summer time spree, two surveys confirmed on Tuesday, suggesting the general economic system can not cope on them fairly as a lot to melt the drag of Brexit.
FILE PHOTO: The shadows of consumers are forged onto the bottom in Birmingham, central England March 24, 2009. REUTERS/Darren Staples
Shops reported whole spending edged up by an annual zero.7 % final month, the slowest rise since October final yr other than a hunch in April which was distorted by the timing of the Easter holiday, the British Retail Consortium mentioned.
A broader measure of shopper spending by Barclaycard (BARC.L) elevated by the smallest quantity in 5 months, rising by an annual three.9 %.
“We’ve seen spending return to a more modest level as consumers balance their budgets after a longer than usual summer of spend,” Esme Harwood, a Barclaycard director, mentioned.
Household consumption accounts for about 60 % of Britain’s economic system. The Bank of England and different forecasters have been stunned by its power because the Brexit vote in 2016, at the same time as pay progress has lagged behind inflation.
The propensity of shoppers to spend has helped to melt a slowdown within the total economic system.
But there have been indicators that after a summer time heatwave and the soccer World Cup, households have turned a bit extra cautious. The BoE final week reported the weakest enhance in borrowing by shoppers in almost three years.
Nearly half of the shoppers surveyed by Barclaycard — 46 % — had been planning to spend much less on Christmas this yr than they did in 2017, she mentioned.
The BRC knowledge confirmed that on a like-for-like foundation, which excludes the impact of adjustments in retailer house, retail gross sales fell zero.2 % in September, the primary non-Easter decline since October final yr.
Reporting by William Schomberg, modifying by David Milliken