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UK consumers plan to get thrifty after Summer spending spree
[LONDON] Britons are planning to rein in their spending after splurging during the summer heatwave.
With worries growing over rising prices and higher interest rates, a third of consumers say they intend to spend less, Barclaycard said in a report published Tuesday.
The warning comes after households made the most of the sweltering summer months, with the value of spending in August alone rising 4.5 per cent from a year earlier.
"Brits have been feeling confident enough in their spending power to enjoy summer events and evenings out," said Esme Harwood, director at Barclaycard. "Looking ahead, it appears that many consumers are planning to tighten their belts and keep a closer eye on their finances after spending more than usual over summer."
Essential spending rose 6.9 per cent last month but Brits were still unwilling to skimp on entertainment, which soared 10.3 per cent, said Barclaycard. Counting the cost of the heatwave is the clothing industry as consumers put off buying autumn and winter fashion lines. Even with the back-to-school boost to children's clothing, overall spending rose just 0.6 per cent.
Another study by KPMG and the British Retail Consortium painted a bleaker view of the U.K. retail sector, with same-store sales increasing just 0.2 per cent in August from a year earlier. In August 2017, the annual growth rate was 1.3 per cent.
"The continued pressure on people's disposable income has meant that some shoppers are increasingly less able to spend on the more discretionary non-food items such as clothing and footwear," said BRC Chief Executive Helen Dickinson. "And it's not only shoppers who are feeling the pinch."