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The consumer sentiment data is based on a survey of 2,000 people conducted from Sep 26 to 30
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[LONDON] British consumer spending grew by the least in four months in September as uncertainty ahead of finance minister Rachel Reeves’ budget next month and rising energy bills deterred shoppers, a survey showed on Tuesday.
The British Retail Consortium (BRC) said that spending in shops increased by 2.3 per cent in annual terms, below August’s 3.1 per cent growth and the weakest rise since May.
Separate data from Barclays showed a drop in a broader measure of consumer spending in September.
“Rising inflation and a potentially taxing budget is weighing on the minds of many households planning their Christmas spending,” BRC chief executive Helen Dickinson said, adding firms faced a dilemma for the busy end-of-year period.
“Retailers also face difficult decisions about investment and hiring over the Golden Quarter given uncertainty over business rates bills arriving in April.”
The brunt of tax hikes announced last year by finance minister Rachel Reeves fell mostly on businesses, while consumers were hit this month by a 2 per cent increase in already high energy prices.
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In its report, Barclays said that spending on debit and credit cards fell by 0.7 per cent in annual terms in September after August’s 0.5 per cent increase.
Spending on essential items fell by 2.6 per cent, the fifth monthly decline in a row. Growth in spending on non-essential items was the weakest in 15 months at 0.2 per cent.
Barclays’ measure of households’ confidence reached a four-year high at 78 per cent with sentiment around personal finances the highest in seven months as wages continued to outpace inflation.
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But nearly half of consumers surveyed by the bank said that they were changing their spending habits in anticipation of next month’s budget and a third of those were building up savings.
Barclays spending data was based on debit and credit card spending between Aug 23 and Sep 26, while the consumer sentiment data was based on a survey of 2,000 people conducted from Sep 26 to 30.
The BRC data covered sales made between Aug 31 and Oct 4. REUTERS
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