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UK consumer card spending fell at its fastest pace since 2021 in November, as uncertainty around the Budget weighed on household purchases during the peak retail season.
The value of card spending declined by an annual rate of 1.1 per cent, the largest drop since February 2021, according to data from Barclays published on Tuesday.
The figure, based on 40 per cent of the nation’s credit and debit card transactions, is an early indicator of consumer spending ahead of the official retail sales data that will be published on December 19.
The data is not adjusted for inflation, which hit 3.6 per cent in October, suggesting an even larger contraction in purchases.
Karen Johnson, head of retail at Barclays, said November was a “month marked by uncertainty”, as consumers awaited seasonal discounts and the details of the Budget.
Chancellor Rachel Reeves announced £26bn in tax rises, lifting the overall burden to a record high of 38 per cent of GDP by the end of the parliament.
Barclays data showed spending in bars, pubs and clubs contracted by an annual rate of 1.5 per cent in November, with takeaways and fast food down 1.3 per cent. Restaurant spending was down by 0.8 per cent.
The amount being spent on hotels also declined, as well as a sharp fall for department stores. However, agencies, pharmacies, and health and beauty stores reported growth in sales.
Household spending, which makes up a large part of the UK economy, has yet to recover to pre-pandemic levels on a per capita basis, official statistics show.
In the third quarter, the British economy only rose by 0.1 per cent, the lowest pace since the end of 2023.
Jack Meaning, chief UK economist at Barclays, said: “Even with a boost from Black Friday, consumer spending remained muted as we moved through the final quarter of the year.”
He added that the question was whether falling inflation and interest rates would be enough to revive demand in 2026 amid tighter fiscal policy.
The British Retail Consortium also published disappointing spending figures for November. The value of retail sales grew 1.4 per cent, the weakest pace in six months and nearly half the 2.5 per cent average of the last 12 months, the data showed on Tuesday.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Pre-Budget jitters among shoppers meant the month of Black Friday did not deliver as strongly as retailers had hoped or the economy needed.”
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Non-food sales were barely up by 0.1 per cent, well below the 12-month average of 1.6 per cent growth. Online non-food sales rose marginally, up by 0.5 per cent compared with a 12-month average of 2.5 per cent, and food sales growth was also below its one-year average.
“Rising household costs and nervousness about the economy continue to impact discretionary buying,” said Linda Ellett, UK head of consumer at KPMG, which produces the data with BRC.
“Retailers will be hoping that Budget clarity has now provided more certainty for consumers about their ability to spend in the months ahead,” she added.
