UK consumer spending slows in run-up to Brexit


December 4, 2018 2:45 pm

British consumer spending grew last month at its slowest pace in more than a year. Photo: Xinhua

INTERNATIONAL – British consumer spending grew last month at its slowest pace in more than a year, excluding Easter distortions, with online Black Friday sales failing to offset a lack of confidence about the economy ahead of Brexit, industry data showed on Tuesday.

Total retail spending was up 0.5 percent in November compared with the same month last year, slowing sharply from a rise of 1.3 percent in October, the British Retail Consortium said.

“Weak consumer demand and falling confidence mean that retailers are in for a nerve-wracking run up to Christmas,” BRC chief executive Helen Dickinson said.

“Conditions in the industry have been particularly tough since the vote to leave the EU in 2016 and the current uncertainty has only compounded the challenges.”

Separately, Barclaycard said its broader measure of consumer spending rose by 3.3 percent last month, the slowest growth since March.

“It seems shoppers are yet to make their main Christmas purchases for friends, family and loved ones – despite many retailers offering Black Friday discounts to try and boost sales,” Barclaycard director Esme Harwood said.

Like Britain’s overall economy, spending by consumers has slowed since the 2016 Brexit vote. The lack of clarity about how Britain will leave the European Union in less than four months’ time has weighed on consumer confidence.

Cold weather last month was not enough to tempt shoppers to buy winter clothes, as clothing spending dropped by 2.9 percent, the biggest fall since October 2017, Barclaycard said.

Consumers spent more on entertainment as ticket sales soared by 30.5 percent, the most since November 2014, boosted by the Spice Girls reunion tour and the release of the film Fantastic Beasts: The Crimes of Grindelwald, the company said.

The BRC said like-for-like retail sales, which exclude new store openings and more closely represent how retailers typically present their earnings, were down 0.5 per cent on November last year, the biggest fall since October 2017 excluding distortions caused by the timing of Easter.

Prime Minister Theresa May risks seeing her Brexit transition deal rejected in a key parliamentary vote on Dec. 11. In the case of a no-deal Brexit, businesses fear disruption to supply chains and goods imports to Britain. Barclaycard said consumers’ confidence in their finances was the lowest level since 2015, influenced by “ongoing economic and political uncertainty”.

The BRC said Black Friday was an “increasingly digital event” as a record 33.8 percent of spending on non-food products was done online.

Reuters

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