Consumer spending growth slowed to 2.4 percent in October as Brits cut back across the board to cope with household finances.
Data from Barclaycard reveals that spending on essentials (2.9 percent) outstripped discretionary spend growth (2.2 percent) for the second month running.
This slowdown in expenditure on ‘nice-to-haves’ was driven by a significant contraction in clothing spend (-4.1 percent) – the lowest figure recorded since March 2013.
The overall trend of paring back indicates that many consumers have adapted to months of ‘feeling the squeeze’ of higher inflation and stagnant wage growth.
This could be why six in ten (64 percent) said they are confident in their own household finances.
Brits have a gloomy outlook on the UK economy, however, with just 31 percent expressing confidence. This is the second lowest proportion in the last 12 months and down 6 percent on September.
Paul Lockstone, managing director at Barclaycard, said: “Household expenditure remained muted in October and, when taking into account inflation, equated to a decline in real terms. This is a reflection of consumers paring back to cope with their reduced spending power, a tactic which, for the moment, has given them confidence in their ability to manage their household finances.
“That said, last month many indicated an interest rate rise would affect their everyday spending. In light of the Bank of England’s announcement last week, it’ll be interesting to see how shoppers, who have so far demonstrated their resilience, continue to juggle the many demands on their budget. As we enter the run up to Christmas, Black Friday will be the first major opportunity to see whether consumers really do tighten their belts.”