UK Consumer Spending Growth Slows to 1.1 Percent in February

Consumer spending in the United Kingdom grew slowly in February as households became increasingly pessimistic about the economic outlook. The ongoing conflict in the Middle East has raised significant concerns regarding a potential rise in inflation, dampening consumer sentiment across the country.

According to a survey by Barclays PLC, consumer confidence in the strength of the British, European, and global economies fell throughout the month. While overall card spending remained subdued, the bank reported that spending on non-essential items reached a six-month high. Annual consumer spending increased by 1.1% in February, compared to a 0.8% rise in January.

The Barclays report highlighted that four in five consumers are worried that the Middle East conflict will lead to higher fuel prices, energy bills, and inflation. Additionally, over half of the respondents expressed concern about potential travel disruptions, while nearly half have begun taking defensive financial actions, such as reducing energy usage and delaying major purchases.

Data from the British Retail Consortium (BRC) also indicated a weak retail environment, with sales growth slowed by persistent wet weather. Spending at major retailers rose by 1.1% in annual terms, a significant drop from the 2.7% growth seen in January and well below the 12-month average of 2.3%. Online non-food sales also saw a decline of 1.3% year-on-year.

Helen Dickinson, the chief executive of the BRC, commented on the challenges facing the sector as it looks toward the spring season.

Retailers were hoping to boost sales in the spring, but the conflict in the Middle East threatens knocking any recovery off course.

The BRC survey, which covered the period from February 1 to February 28, suggests that geopolitical tensions remain a primary headwind for the retail sector's recovery.