UK recession fears grow as shoppers cut spending 'to save for Christmas'

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Fears that the UK is heading for a recession this winter have intensified amid signs Britain's hard-pressed households are cutting spending as they save for Christmas and higher fuel bills.

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07 Nov 2023

Two monthly snapshots of retail activity found shops and online outlets struggling because of consumer budgets being squeezed by dearer mortgages and the UK’s lingering cost of living crisis.

The British Retail Consortium – the industry’s lobby group – and Barclays said sales were down in October once inflation was taken into account.

The Bank of England has raised interest rates 14 times since December 2001 but the downbeat reports from retailers suggest Threadneedle Street’s action to bring down inflation has come at the expense of weaker consumer confidence and lower sales volumes.

Barclays said card spending rose by 2.6% in the year to October, significantly slower than the 6.7% inflation rate measured by the latest consumer prices index. The BRC/KPMG monitor of retail activity said sales were up 2.5% on October 2022 but stressed its figures were not