UK consumer spending rises ahead of annual budget: surveys
BRITISH shoppers increased their spending moderately in annual terms last month despite industry concerns about tax rises in finance minister Rachel Reeves’ upcoming budget and a looming rise in household energy bills, a survey showed on Tuesday.
The British Retail Consortium said spending in shops increased by 2.0 per cent in annual terms in September, the strongest uptick since March when it increased by 3.5 per cent although less of a rise than the 2.7 per cent recorded in September 2023.
Reeves took office in July following the Labour government’s landslide election win and is set to deliver her first annual budget on Oct 30. She has warned some taxes will increase, although she has ruled out increases to the rates of income tax and National Insurance social security payments.
“With energy prices having again risen, all eyes now turn to the budget and what impact that will have on household discretionary spending in the final quarter of the year,” said Linda Ellett, UK head of consumer, retail and leisure at accountants KPMG, who sponsor the data.
Regulated energy tariffs rose by 10 per cent on Oct 1, increasing the typical annual bill to £1,717 (S$2,926)
A separate survey from Barclays, also published on Tuesday, showed spending on its credit and debit cards rose by 1.2 per cent year-on-year in September, the biggest increase since April after a rise of 1.0 per cent in August.
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However in real terms this represented a fall as British consumer price inflation held at 2.2 per cent in September, slightly above the Bank’s 2 per cent target.
Official retail sales data for August showed a 2.2 per cent rise in retail sales in cash terms, and a bigger-than-expected 1.0 per cent volume increase.
Barclays said spending on discretionary items last month rose by the most since June, with entertainment jumping by 14.4 per cent - the biggest increase since July 2023 when US singer-songwriter Taylor Swift opened sales for the British leg of her concert tour.
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Barclays attributed last month’s jump in entertainment spending to the opening of ticket sales for concerts by British rock band Oasis, who are reuniting after a 15-year split.
In contrast, spending on essential items declined by the greatest amount since April 2020, during the Covid-19 pandemic. Within that, spending on groceries fell for the first time since June. REUTERS
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