Brits rein in spending as rising inflation bites Consumer spending in Britain slowed to a 10 month low in May as people began to feel the impact of rising inflation and slower wage growth, new research has shown.
People spent less, especially on food and petrol, but continued to splash out on cinema tickets and meals at restaurants, according to Barclaycard's analysis of the nation's credit and debit card transactions. But even though Brits upped their spending on going out last month, they are feeling increasingly cautious about their ability to spend overall and noted that rising food and petrol prices meant they felt less positive about spending on non bracelet charms pandora essentials, the report said. Feeling the squeeze: People spent less especially on food and petrol, according to research. It comes as a separate report by the British Retail consortium and KPMG shows that even online sales, which usually show double digit growth, more than halved to hit their slowest growth on record. Barclaycard said that just over half, or 53 per cent, say they feel confident in their household finances the lowest level since it started tracking confidence data in 2015 and down from 70 per cent in March. Meanwhile, consumers' confidence in their ability to spend on non essentials also dipped further with just over half Brits saying they are 'feeling the squeeze' due to a combination of higher food and petrol costs and subdued wage growth. It comes as average earnings increased by 2.4 per cent in the year to March, below inflation which is running at 2.7 per cent and hence eating into people's spending power. Paul Lockstone, managing director at Barclaycard, said consumer growth was subdued last month, but it was too early to say if this was going to last. Plunge: Online sales growth more than halved in the year to May from 13.7% to 4.3% 'With CPI running at its highest rate since 2013, it's no surprise that more of us are starting to "feel the squeeze" of inflation and slower wage growth, perhaps prompting small changes to our spending patterns.' 'It's far too early, however, to suggest that this is the beginning of a period of increased caution. In May we witnessed the resilience of the 'experience economy' and all signs indicate spending on leisure time will continue to be a priority. As we head into summer, it will be interesting to see discount pandora bracelets and charms how the spending picture might change after consumers reassess their household budgets.' Consumer spending growth fell to 2.8 per cent in May, with spending on essentials slowing to 3.1 per cent from Easter fuelled 11.4 per cent in April. Supermarket spending slowed to 1.5 per cent from 10.3 per cent and petrol growth to 7.4 per cent from 14.7 per cent the previous month. Yet Brits continued to spend on the 'experience economy', with double digit growth in cinemas at 11.5 per cent and restaurants at 11.7 per cent. Spending on hotels also increased to 11.4 per cent as consumers planned their summer breaks. A separate report, also out today, highlighted similar patterns whereby consumers started to rein in spending. The pandora jewerly latest BRC KPMG retail sales monitor shows that even online sales, which usually show double digit growth, slowed down to their slowest on record. Online sales of non food products in the UK grew by 4.3 per cent in May, down from 13.7 per cent rise a year ago the lowest since BRC series started in December 2012. Meanwhile, high street retail sales declined by 0.4 per cent on a like for like basis from May last year, and rose by 0.2 per cent on a total basis, against growth of 1.4 per cent a year ago, marking the lowest since January. Cutting down on non essentials: People spent less on clothing and items for the house. The decline was mostly down to people spending less on non food items, according to the report. BRC chief executive Helen Dickinson said: 'The slowdown in overall non food sales was mirrored online in May as annual growth fell to its lowest on record.' She added: 'Overall, May's sales slowdown is indicative of a longer term trend of a decline in consumer spending power. As household budgets become increasingly squeezed by inflation, predominantly in the non retail part of the consumer basket, it's vital that the next Government helps retailers keep prices low for ordinary shoppers.' 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