The data give a mixed signal for UK rates and sterling. Headline spending is firmer, but much of the gain reflects higher fuel prices, so it shows energy costs rather than stronger real demand. That supports the view that the oil shock is acting as a tax on households, which tends to weigh on discretionary spending and confidence over time. Flat non-food sales and the weakest confidence since April argue against reading the numbers as a pickup in underlying consumer momentum. Any easing in oil prices from Middle East de-escalation would offer households relief at the pump, while the Budget remains a near-term source of caution for spending and for the pound.
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Earlier:
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Britons spent more in October, but mostly on fuel and food, and they feel gloomier about the economy than at any point since April.
Summary:
- BRC total retail sales rose 1.5% year on year in October, from 1.3% in September and the strongest since June; like-for-like sales rose 1.1%
- Food sales rose 3.2% while non-food sales were flat, with some shoppers waiting for Black Friday deals
- Higher household costs and caution ahead of the Budget kept growth modest
- Barclays card spending rose 2.3%, the biggest increase since July 2025, with essential spending up 3.1% on a 22.7% jump in fuel spending
- Barclays’ consumer confidence gauge fell to its weakest since April
UK retail sales grew modestly in October, the British Retail Consortium said on Tuesday. Higher petrol prices, caution ahead of the Budget and shoppers holding off for Black Friday deals kept a lid on spending, even as a separate card-spending survey from Barclays showed the strongest growth in more than a year.
Total retail sales rose 1.5% from a year earlier, up from 1.3% in September and the strongest increase since June, according to the BRC. Like-for-like sales, which strip out changes in store space, rose 1.1% after 1.0% the previous month. Food sales climbed 3.2% while non-food sales were flat, a split that points to price-driven grocery spending rather than a broad pickup in discretionary demand. The BRC noted that sales of cupboard staples rose modestly after the government advised households to stock up for emergencies.
Commentary accompanying the survey described overall growth as modest, citing higher household costs, caution ahead of the Budget and consumers waiting for Black Friday discounts.
Barclays’ data, which covers card spending on a wider range of goods and services, painted a firmer picture. Consumer spending rose 2.3% year on year in October, up from 2.0% in September and the biggest increase since July 2025. Essential spending grew 3.1%, driven by a 22.7% jump in spending on fuel, while non-essential spending rose 1.9%. Entertainment had its strongest month since September 2024 as tickets for the Glastonbury music festival went on sale.
The fuel figure shows how higher energy costs are inflating headline spending. Much of the increase reflects households paying more at the pump rather than buying more, which squeezes budgets for other goods.
That strain shows up in sentiment. Barclays said consumer confidence in the UK economy was at its weakest since April, suggesting households remain wary despite the steadier spending figures. Non-food sales were flat, and Black Friday is likely to pull some purchases into late November. That leaves October’s numbers as a mixed read on UK consumer demand heading into the key holiday trading period.
This article was written by Eamonn Sheridan at investinglive.com.