UK weather to hit consumer spending in July | kbnmart

British shoppers kept a tight grip on their money last month as wet weather again dampened their appetite for spending, two surveys published on Tuesday showed.

Barclays said spending on credit and debit cards fell by 0.3% year-on-year in July, the second decline since February 2021, although less sharp than the 0.6% fall in June.

England’s men’s football team reaching the Euro 2024 final has boosted spending in pubs and people are stocking up on food for a sunny July barbecue, Barclays said.

But two in five people surveyed by Barclays said they spent less because of the wet weather during the month and the drop in spending contrasts with price growth of about 2%, according to official inflation data.

The British Retail Consortium reported that sales values ​​rose by 0.5% in July 2023. This compared with a 0.2% fall in June, but was below the average rise of 1.4% over the past 12 months.

Both surveys showed a decline in unnecessary spending.

Jack Manning, chief economist at Barclays UK, said the bigger picture, despite the volatility caused by weather, sporting events and concert tours by stars such as Taylor Swift, was a recovery in purchasing power and consumer confidence.

“This, coupled with the fact that the Bank of England has started to cut interest rates, should translate into stronger growth in core spending as we move into the second half of this year and into 2025,” Manning added.

The Bank of England said last week that the British economy would emerge in early 2024 from a short, shallow recession in the second half of last year and is expected to grow by 1.25% over 2024 as a whole, perhaps outpacing France, Germany and Italy.

New Prime Minister Keir Starmer said he would seek to double the pace of economic growth.

A Barclays survey showed confidence in the UK economy was at its highest since February 2022. But respondents were less confident about their household finances, with a third worried about the higher water bills announced in July.