Spurt in spending in April was result of late Easter not upward trend, say Barclaycard and British Retail Consortium.
Barclaycard and the British Retail Consortium have warned that a spurt in spending in April was the result of the late timing of Easter and said the growing squeeze on incomes meant the underlying trend in high street activity was weak.
The two surveys found that rising inflation had resulted in consumers devoting an increasingly share of their pay packets on household essentials.
Barclaycard said consumer spending was 5.5% up on April 2016 but added that the increase was mainly driven by supermarkets and petrol stations. It said spending on these essentials was up more than 11% year on year, the fastest rate of growth since it began releasing consumer spending data in 2012.
Paul Lockstone, managing director at Barclaycard, said: “A late Easter and rising prices provided a superficial boost to spending in April, but behind the headline figure it’s clear consumers are recognising and responding to the inflationary pressures being placed on household budgets. Despite growth across a number of categories, the spending picture in real terms is one of growing caution, as seen by declining confidence levels amongst the UK’s consumers.”
Consumer spending was boosted by the sharp fall in oil and other commodity prices in 2014 and 2015, which raised the real value of incomes by pushing the annual inflation rate to zero.