Households cut back on spending at fastest pace in five years
Households cut back on essential spending at the fastest pace in five years last month as concerns over the economic outlook weighed on consumer confidence.
According to figures published by Barclays, essential spending fell by 3.1 per cent in November, the sharpest monthly fall since 2019, when the bank first started publishing spending figures.
The survey showed that supermarket spending fell by 1.8 per cent in the month, with just under two thirds (64 per cent) of consumers looking to cut back on spending.
Looking across all sectors, card spending fell by 0.5 per cent year-on-year, the first drop since July.
Consumer confidence in the UK economy also declined in the month, falling to 25 per cent in November from 31 per cent the month before.
The figures add to a growing sense that the UK has lost momentum, having been one of the best performing major economies in the world in the first half of the year.
“A number of factors weighed on consumer spending in November, notably easing consumer confidence post-summer, and expectations that post-budget, inflation and interest rates will stay higher in the coming months,” Jack Meaning, chief UK economist at Barclays said.
“Looking ahead, the extent to which we see a seasonal bounce around Black Friday and Christmas will serve as a good test of the economy going into 2025,” he added.
Even though consumers were looking to cut back, non-essential spending remained in growth, rising 0.8 per cent compared to last year.
A large part of this was due to a big spike in cinema spending, which increased just under 23 per cent year-on-year as punters flocked to Gladiator II, Wicked and Paddington in Peru.
Separate figures from the British Retail Consortium (BRC) published this morning also showed that there was a sharp fall in retail spending in November compared to last year, although a large part of this was due to the timing of Black Friday.