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UK Consumer Spending growth cools as Brexit hits confidence
[LONDON] UK household spending was subdued last month as Britons expressed concern that Brexit will make them worse off.
Annual consumption growth slowed from January as spending in supermarkets eased, Barclaycard said in a report on Tuesday. While overall retail sales rose on the month, sales of non-food items declined in the three months through February on a like-for-like basis, according to a separate survey by the British Retail Consortium.
"Consumers are cautious about the potential ramifications of whatever settlement the UK achieves, and half of us fear that the outcome will leave us worse off than we are now," said Paul Lockstone, managing director at Barclaycard. "As negotiations continue it's likely that this will continue to weigh on sentiment."
Shoppers are downbeat about their spending power as talks to leave the European Union drag on without more clarity about what will happen when the country leaves the bloc next year.
Brexit has also driven up inflation by weakening the pound, and the uncertainty about the outlook has prompted firms to hold back on hiring and investment.
There are some signs that Britons will regain some purchasing power this year if wages start growing faster than prices - a scenario predicted by the Bank of England. Advertised salaries climbed to the highest since April 2016 in January, employment search company Adzuna said in a separate report.