British consumer spending fell slightly in February as bad weather kept shoppers home, the British Retail Consortium (BRC) reported on Tuesday.
A survey by the BRC indicated that as well as weather, shoppers remained cautious due to high borrowing costs and inflation.
The BRC reported that consumer spending increased by 1.1% in February from the previous year, with inflation taken into account.
This was slightly below a rise of 1.2% in January.
Linda Ellett, KPMG’s UK head of consumer markets, leisure and retail said, “As many households continue to adapt budgets to meet higher essential costs, including higher mortgage rates, consumer reluctance to get out there and start spending is likely to remain in the short term.”
Ellett added that cuts in National Insurance social security contributions did little to encourage consumer spending.
The contributions came into effect in January, and finance minister Jeremy Hunt said the move would help put more money in people’s pockets.
Hunt is due to deliver his Spring Statement today.
The finance minister has so far played down speculation of pre-election tax cuts.
Barclays
Separate data from Barclays on Tuesday showed the weakest increase in consumer spending in almost two years.
This is thought to reflect a drop in store spending as consumers avoided shopping in-store due to rainy weather.
Barclays customers spend 1.9% overall on debit and credit cards in February compared to the same period a year ago.
This is the smallest increase since September 2022 and a slowdown from January’s 2.9% growth.
However, Barclays said consumer confidence about non-essential spending was at its highest since November 2021.
Consumer concerns about inflationary pressures softened to the weakest since the bank began tracking the data over two years ago.
Jack Meaning, chief UK economist at Barclays, said, “While many people will have taken advantage of recent price promotions, they look to have held back on spending at least some of what they saved elsewhere.”
Read More: British Grocery Price Inflation Slows To 5.3% – Kantar
