Last month, UK consumer spending showed only slight growth, as rising energy costs and anticipation of the October 30 budget kept shoppers cautious. According to a survey by the British Retail Consortium (BRC), spending in UK shops rose just 0.6% annually in October—down from September’s 2.0% and marking the weakest growth since July.
Barclays’ data echoed the BRC findings, revealing a slowdown in consumer spending. Linda Ellett, Head of Consumer, Retail & Leisure at KPMG, noted that speculation around the budget’s impact, delayed half-term breaks, and anticipation for Black Friday sales all contributed to a weaker October for retailers.
While Finance Minister Rachel Reeves’ latest budget mainly targeted businesses with tax hikes, households still faced higher costs, especially due to a 10% rise in the regulated energy price cap. This added strain to consumers already feeling the pinch, as essential spending—especially in supermarkets—fell by 2.2%, the steepest decline since April 2020. However, spending on non-essentials increased by 2.1%, driven largely by ticket sales for major concerts like Coldplay.
Barclays’ survey found consumers were feeling less worried about food inflation and cautiously optimistic about discretionary spending. Jack Meaning, Barclays’ Chief UK Economist, expressed optimism that easing price pressures could set the stage for renewed spending growth. As the Bank of England prepares for a potential interest rate cut, some hope this will further ease financial pressures and revive consumer confidence.
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