UK Retail Sales Grow Slowly Amid Budget Anxiety

British consumers limited their spending in September, driven by rising fuel costs and anxiety over the upcoming October 28 budget. Data from the British Retail Consortium showed total retail sales rose by 1.3% year-on-year, while Barclays reported a 2.0% annual increase in card spending.

Fuel spending surged by 17.3% after diesel prices reached record highs, contributing to a 2.5% increase in essential spending. Unseasonably warm weather boosted spending at bars, pubs, and clubs by 3.8%, though it negatively impacted sales for clothing and footwear.

While confidence in household finances reached a seven-month high of 67%, 68% of consumers expressed concern regarding the impact of Finance Minister John Healey's budget. Approximately 30% of consumers reported cutting non-essential spending. Helen Dickinson, Chief Executive of the British Retail Consortium, noted that retail sales growth remained subdued as households remained cautious ahead of expected rises in taxes and household bills.