You are here: Home - Credit Cards & Loans - News -

Consumer spending picks up, but confidence in the economy is low

Written by:
In a boost to the UK’s beleaguered economy, consumer spending picked up 3.1% year on year in March as Brits were tempted out by the warmer weather.

Last year, the ‘Beast from the East’ kept spending low as shoppers stayed indoors. This March, non-essential expenditure grew 3.4% year on year, while essential expenditure rose 2.2%, according the latest consumer data from Barclaycard.

In spite of these strong figures, confidence in the UK economy has fallen to its lowest level since 2014. Seven in ten (69%) saying they are not confident in the current environment. Three in ten consumers are concerned that the cost of everyday items will increase and 17% are worried about medicine shortages. Almost half of Brits (46%) are worried that their quality of life will decline due to Brexit.

Among non-essential spending, pubs and restaurants saw the strongest growth in March, recording uplifts of 15.1% and 12.1% respectively. Garden centre spend increased 34.2% year-on-year.

Clothing decline

In contrast, clothing retailers continued to be weak, as sales saw their sixth consecutive month of decline. Department store spending also contracted 4.7% as the retail sector continues to face challenges. This has been seen in problems in key department stores such as Debenhams.

Esme Harwood, director at Barclaycard, said: “In contrast to the extreme weather conditions experienced last year, a milder March resulted in an uplift in spending, with consumers dining out and making the most of the welcome sunshine.

“Despite this, underlying sentiment is cautious. March was characterised by ongoing uncertainty around Brexit, with consumers concerned about an impact on food prices and supplies. In light of this, consumer confidence in the UK economy is the lowest it’s been since we began recording this data.”

Falling confidence

Laura Suter, personal finance analyst at investment platform AJ Bell, said the never-ending Brexit process was causing uncertainty for many: “Barclaycard’s latest data shows that 70% of people aren’t confident about the current environment, with half of Brits thinking Brexit will lead to a decline in their quality of life.

“Despite this, Brits are not stopping spending on nights out, with pubs and restaurants seeing a big boost in sales, thanks to the better weather at the start of this year compared to the Beast from the East last year. However, essential spending has dropped as people keep an eye on the pennies, once you take into account petrol spending, with Brits continuing to hunt out cheaper supermarkets and deals at the checkout.

“As Debenhams’ woes continue, it will surprise no-one that the high street continued to have a tough time in March, with spending in department stores down again, and clothes retailers seeing their sixth month in a row of falling spend.”



There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • What are some things to be aware of in choosing property to fund your retirement? Find out from our pension special…
  • RT @Defaqto: With many nervous about taking an overseas trip, Brits are booking up holidays closer to home. But should you buy travel insur…
  • RT @Defaqto: With many nervous about taking an overseas trip, Brits are booking up holidays closer to home. But should you buy travel insur…

Read previous post:
Why last-minute investing can cost you thousands

The end of the tax year tends to prompt a flurry of activity from savers and investors, but they'd be...