News

Consumer spending hits a 10-month low as confidence wobbles

08 June 2017

Consumer spending growth slowed to 2.8% year on year in May, new figures from Barclaycard have shown.

The figure is the lowest in 10 months, as overall confidence in household spending power cooled in response to rising inflation, which hit 2.7% in April.

Shoppers spent less on groceries and fuel in particular, with supermarket growth down to 1.5% from 10.3% the previous month, and petrol growth down from 14.7% to 7.4%.

Perhaps more significantly, just over half (53%) of respondents said they felt confident in their household finances – the lowest level since Barclaycard started tracking confidence data in 2015.

Barclaycard managing director Paul Lockstone said: “Consumer spending growth was subdued last month as shoppers paused for breath after an Easter bounce in April.

“With the Consumer Prices Index running at its highest rate since 2013, it’s no surprise that more of us are starting to ‘feel the squeeze’ of inflation and slower wage growth, perhaps prompting small changes to our spending patterns.

“It’s far too early, however, to suggest that this is the beginning of a period of increased caution. As we head into summer, it will be interesting to see how the spending picture might change after consumers reassess their household budgets.”