Rise in UK consumer spending

UK consumer spending in September rose at the fastest rate so far in 2017, with the exception of a peak in April around Easter, according to Reuters. A survey revealed that  price rises of food and clothing after the Brexit vote accounted for much of the spending increase.

According to figures from the British Retail Consortium (BRC), retail sales increased 1.9% annually on a like-for-like basis, up from 1.6% in August.

The increase indicates that British shoppers are adjusting to the inflation rise which occurred following the drop in the value of the pound after the Brexit vote in June 2016. The Bank of England is expected to announce its first interest rate increase in a decade in the coming months.

BRC confirmed that growth in total sales in September fell to 2.3% in September from 2.4% in August but was still stronger than in most months of 2017.

BRC chief executive Helen Dickinson said: “Spending is still focused towards essential purchases with consumers buying their winter coats and back-to-school items, but shying away from big-ticket items such as furniture and delaying the renewal of key household electrical goods.”

Food sales increased 2.5% in the three months leading up to September, while non-food sales only increased 0.5%. The Confederation of British Industry announced in September that its retail tracking indicated unexpected growth in sales to a two-year high in September, boosted by sales of food and clothing.