Fresh economic data released on Friday provided a mixed picture of the UK consumer, with retail sales rising more than expected but consumer confidence slipping.
The weather played a part in retail sales rising 1% in August, much better than the 0.4% consensus expectation.
“It’s no secret that people feel happier when the sun shines and that happiness tends to impact their spending habits. Warm summer evenings are the perfect backdrop for a BBQ with friends and family, requiring a quick trip to the supermarket to stock up on burgers, buns and beer” said Danni Hewson, AJ Bell head of financial analysis.
“Food sales provided a substantial boost to retailers in August with fragile consumer confidence enjoying a rate cut hug which offset some of the political messaging that’s since eroded some positivity.
“Ever since lockdowns blighted people’s lives, they have put experiences ahead of stuff and food often plays a vital role in creating those memorable events that will be cherished as nights draw in and summer excesses fade into memory.”
However, while the good weather ramped up people’s supermarket spending, Gfk’s Consumer Confidence reading slipped to -20 from -13, signalling underlying concerns of the UK consumer.
The -20 read was the lowest since March, showing that all of the optimism built up over the summer has quickly evaporated. Potential Labour tax risers are to blame.
For all the talk of helping the UK grow, Labour has done exactly the opposite in the first months of government.