British consumer spending grew at the slowest pace in more than a year last month, reflecting concerns about the cost of living in the run-up to Christmas, according to a new survey.
Barclays said spending on its debit and credit cards between 24 September and 21 October was 2.6% higher than a year earlier, the smallest annual increase since September 2022 and down from growth of 4.2% the month before.
Adjusted for consumer price inflation – which was 6.7% in September – the volume of goods and services bought by British shoppers fell.
The Bank of England increased interest rates over 14 consecutive meetings to August this year. Last week it signalled it planned to keep them at a 15-year high to bring inflation down, even as it said the economy was set to flatline and only half the impact of its rate hikes had so far been felt.
"Brits cut back on non-essential categories such as clothing and restaurants in October, as thoughts turned to saving for Christmas and budgeting for winter fuel bills. The unseasonably warm weather also hampered spending on indoor experiences," said Esme Harwood, a director at Barclays.
One exception was spending at pubs, bars and clubs, which grew 5.9% off the back of fans watching the Rugby World Cup.
Consumer Spending Trends
Separate figures from the British Retail Consortium (BRC) showed a similar picture for spending at major retailers.
Spending growth slowed to a three-month low of 2.5% in October from 2.7% in September.
The BRC data covers the period 1 October to 28 October – a week later than the Barclays figures – and it reported improved demand for autumn and winter outdoor clothing as the weather cooled and grew wetter towards the end of the month.
Sales growth was driven by food spending, which rose 7.9% year-on-year in the three months to the end of October compared with a 1.0% fall in non-food spending over the same period, the BRC said.
"Many households are also delaying their Christmas spending in the hopes they can grab a bargain in the upcoming Black Friday sales," BRC chief executive Helen Dickinson said.
Barclays said 37% of households expected to spend less on Christmas this year due to higher day-to-day bills, while 13% planned to spend more, based on a survey of 2,000 households carried out from 20 October to 24 October.
