Two surveys have shown that the UK’s summer spending habits have dropped. After a sharp increase over the summer, it is evident that habits dwindled in September. This demonstrates that the overall economy cannot rely on British consumers to soften the economic impacts of Brexit.
It has been reported that total spending increased by an annual 0.7% in September. But, this is the slowest rise since October 2017. This is excluding the Easter decline in April.
September’s 0.7% annual spending increase is significantly lower than the 2.3% growth during the same month last year.
A wider measurement of consumer spending, conducted by Barclaycard, demonstrates an increase by the smallest amount in five months. Indeed, it rose by an annual 3.9%.
Esme Harwood, a director of Barclaycard, commented:
“We’ve seen spending return to a more modest level as consumers balance their budgets after a longer than usual summer of spend. Rising prices are having an impact on shoppers’ spending priorities, with more of their household budget devoted to everyday essentials such as petrol.”
Moreover, almost half of all Barclaycard consumers surveyed had plans to spend less on Christmas 2018 than they did the previous year.
Household consumption is responsible for roughly 60% of the UK’s economy. In fact, the Bank of England, among other forecasters, have been impressed by its strength since the Brexit referendum.
However, after a British summer of World Cup success and scorching weather, UK households have reigned in their spending habits.
Often around September, retail spending experiences a back-to-school sales push. But, this was not the case this year and has proved less reliable in pushing sales. The UK’s head of retail at KPMG, Paul Martin, has said:
“The final golden quarter of the year marks the ultimate test for many players, but retailers must also successfully navigate the upcoming government budget, Black Friday, Christmas, and of course Brexit.”
Retailers such as John Lewis and Partners are experiencing tough economic times.