June 23, 2024

Wet weather dampens UK consumption in May

Wet weather and continued pressure on the cost of living dampened the outlook for British consumers in May. A survey shows the lowest spending growth in more than three years.

Barclays said its customers’ spending on debit and credit cards was 1.0% higher than a year earlier. That was a slowdown from the previous month’s 1.6% growth and the weakest increase since February 2021.

On Tuesday, the British Retail Consortium said sales at its member stores rose 0.7% year-on-year. This represents a 4.0% decline in April, but is significantly weaker than last year’s 3.9% growth.

Neither Barclays nor the BRC data is adjusted for inflation, which was 2.3% in April – so the volume of goods and services purchased in May is likely to fall.

Some parts of England had the wettest day in May and the wettest in a month, according to the Bureau of Meteorology. It kept shoppers indoors and overall rainfall was 16% above the UK average.

“Despite a strong bank holiday weekend for retail, the slight improvement in weather in May was only a small increase in retail sales last month,” said BRC chief executive Helen Dickinson.

The British economy was in a shallow recession in the second half of last year, but posted strong quarterly growth of 0.6% in the first three months of this year.

Prime Minister Rishi Sunak last month called for an election on July 4 — contrary to widespread expectations that he would wait until October or November — which some analysts say reflects a view that voters will not fare better this year.

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Barclays said 87% of consumers it surveyed were concerned about high household bills, particularly council tax, broadband and mobile bills and water bills. Nearly half of consumers reported cutting back on discretionary spending, such as spending less on summer clothes.

Barclays’ data is based on spending between April 20 and May 17, while the BRC’s figures cover the period from April 28 to May 25.