By Suban Abdulla LONDON (Reuters) -British consumer spending lost momentum in May after a bounce the month before, as households' confidence in their personal finances and capacity to spend fell,
UK Consumer Spending Slows After April Surge, Surveys Indicate
By Suban Abdulla
LONDON (Reuters) -British consumer spending lost momentum in May after a bounce the month before, as households' confidence in their personal finances and capacity to spend fell, surveys of retailers and consumers showed on Tuesday.
The British Retail Consortium said spending in shops rose by just 1% last month, the smallest rise in six months and down from a 7% jump in April, which was the highest year-on-year increase since the COVID-19 pandemic.
"While the sunshine continued, the pace of retail sales growth didn't in May. Early seasonal purchases were likely a factor, as was a dampening of some spending appetite as households reflected upon the recent combination of essential bill rises," said Linda Ellett, UK head of consumer, retail & leisure at accountants KPMG who sponsor the BRC data.
Official data last month showed British retail sales jumped by much more than expected in April, partly due to sunnier than normal weather boosting fashion and food sales for barbecues and picnics.
However, consumers were also hit by a 6% increase in a regulated price cap on household energy tariffs in April as well as other increases in bills, weighing on their scope to continue spending.
Separate figures from Barclays on Tuesday also showed softer growth in consumer spending in May.
In its report, Barclays said that consumer spending - which covers a wider range of goods and services than retail sales - rose by 1.0% in May, slowing from April's 4.5% growth.
Its measure of households' confidence declined by three percentage points to 67%, and nearly half of consumers said they were planning to cut back on discretionary spending.
Concerns about interest rates also rose.
The Bank of England is widely expected to hold interest rates at 4.25% next week as inflation pressures linger.
Barclays spending data was based on debit and credit card spending between April 26 and May 23, while the consumer sentiment data was based on a survey of 2,000 people conducted from May 23-27.
The BRC data covered sales made between May 4 and May 31.
($1 = 0.7375 pounds)
(Reporting by Suban Abdulla; editing by David Milliken)
