UK retail sales slow as households brace for Reeves budget, Barclays and BRC say

UK consumer spending slowed in September as households turned cautious ahead of Chancellor Rachel Reeves’s budget and faced rising energy bills, surveys from the British Retail Consortium (BRC) and Barclays showed.

The BRC said total retail sales rose 2.3% year-on-year, the weakest since May and down from 3.1% in August, while like-for-like sales eased to 2.0%. “Rising inflation and a potentially taxing budget is weighing on the minds of many households planning their Christmas spending,” said BRC Chief Executive Helen Dickinson.

Barclays reported a 0.7% annual fall in card spending after a 0.5% rise in August. Essential spending dropped for a fifth month, while non-essential spending growth was the weakest in over a year.

Despite improving wage growth lifting confidence to a four-year high, nearly half of consumers said they were adjusting spending ahead of the budget, with one-third saving more. Retailers, meanwhile, face uncertainty over business rates and subdued demand heading into the “Golden Quarter.”

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The weaker retail and spending data point to cooling domestic demand just weeks before Chancellor Reeves unveils her budget. Softer consumption could ease near-term inflation pressure but raises growth risks heading into the winter, reinforcing expectations for a cautious Bank of England.

This article was written by Eamonn Sheridan at investinglive.com.