UK households cut spending at fastest pace in almost five years, says Barclays

"UK households cut back on spending at the fastest pace in almost five years last month as consumers put Christmas shopping on hold, according to a leading survey. Adding to concerns that uncertainty surrounding the budget has helped dampen consumer confidence, Barclays said card spending fell 1.1% year on year in November the largest fall since February 2021. The bank said retailers still enjoyed their busiest day of the year so far on Black Friday,"

"However, the British Retail Consortium and the consultancy KPMG found that the usual Black Friday lift was much less significant this year caused by shoppers having jitters. Black Friday has become a key trading period for retailers, kicking off the Christmas shopping season and giving shops an early insight into their customers' appetite for spending. The BRC said sales were moderately ahead of those last November, propped up by higher food spending."

"Food sales increased 3%, though this rise was below the average rate of inflation, at 3.6%. Sales of other products increased by just 0.1% year on year below the 12-month average of 1.6%, the BRC said. Opposition parties have blamed Rachel Reeves for harming consumer confidence with months of speculation before the budget on 26 November. The chancellor has since come under pressure to review changes to business rates, which medium-sized retailers and pub chains say will hit them especially hard."

UK households reduced spending in November, with card transactions down 1.1% year-on-year, the largest fall since February 2021. Retailers saw a spike on Black Friday with transaction volumes above average, but the seasonal lift was much smaller as shoppers showed jitters. Food sales rose 3%, below the 3.6% inflation rate, while non-food sales grew only 0.1%, underperforming the 12-month average. Opposition parties blamed pre-budget speculation for weaker consumer confidence, and the chancellor faces pressure to review business-rate changes that medium-sized retailers and pub chains say will hit them especially hard. Pub spending slowed and alcohol-free choices increased among younger adults.

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