While overall spending was 1.8% higher than the previous month, it was well below the 8.8% rise in consumer price inflation, according to Barclaycard, which oversees nearly half of the nation’s credit and debit card transactions.
Furthermore, the data showed the sector grew by 10.2% with pubs, bars and clubs improving by 1.7%, though prior to September this would have been the smallest growth for the category since March last year, while restaurants saw a decline of 11.3%.
Additionally, Barclaycard cited rail strikes and more people working from home as well as rising living costs as possible causes, with petrol and diesel prices having risen 17.7% year-on-year, 6.6 percentage points higher than September’s uplift, while spending on utilities grew 36%.
Further cutbacks
Barclaycard director Esme Harwood said: “Rising petrol and supermarket costs continue to bite, but Brits are spending less on energy bills as Government support kicks in and people find ways to economise at home.
“With the festive season around the corner, we’re likely to see further cutbacks, as Brit’s rein in their Christmas spending."
While year-on-year spending on non-essential items rose from 1% in September to 2.5% in October, this was lower than July (8%) and August (3.6%), with several categories recording moderate growth due to rising inflation, as well as changing consumer behaviours.
Furthermore, more than half of Brits (52%) cut back on discretionary purchases in order to afford their energy bills this winter while 62% said they were spending less on eating out, swapping nights out in the on-trade for nights in with the takeaway and fast-food category having seen an 11.7% growth in October.
Restrained approach
Moreover, with the festive season approaching, almost half (48%) of those surveyed planned to cut down on Christmas purchases, including festive activities and gifts, to save money this year with two fifths (42%) planning to curb spending on Christmas parties and socialising.
Confidence in the UK economy also fell by 15% last month, the lowest level recorded since Barclaycard began tracking this data in 2015 and less than half the level this time last year (31%), leaving 92% of consumers worried about the negative impact rising inflation could have on their personal finances.
Harwood added: “Consumers continue to swap big nights out for cosy evenings in as they reduce their discretionary spending.
“[Many] are adopting a restrained approach to festivities, reaching for pre-loved gifts, and setting spending limits to manage their costs during this traditionally expensive time of year.”
