Consumers cutting back, but furniture and flooring a bright spot

The Barclays Consumer Spend report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending. In its most recent edition, the report shows that consumer card spending fell -0.8 per cent year-on-year in October, a slight drop from September (-0.7 per cent), and considerably lower than the latest CPIH inflation rate of 4.1 per cent. Essential spend declined (-2.5 per cent) for the sixth consecutive month, while growth in discretionary spending was flat (0.1 per cent), as a combination of pre-budget anticipation, upcoming Black Friday deals and milder weather led consumers to delay purchases or cut back across a number of categories.

Despite the overall slowdown, the health & beauty category maintained strong growth, up 7.6 per cent. Furniture stores were another bright spot, enjoying their eleventh consecutive month of growth, up 5.3 per cent, while garden centre spending increased 7.6 per cent year-on-year, helped by a warm start to October.

Julien Lafargue, Chief Market Strategist, Barclays Private Bank and Wealth Management, said: “Consumers and businesses alike appear to have adopted a ‘wait and see’ approach ahead of the Autumn Budget. While this is generating some short-term headwinds, it could position the UK economy for a rebound once the uncertainty lifts, potentially setting the stage for a strong festive season.”