UK consumer spending dropped at its most accelerated rate in more than a decade. The last October to see consumers restrict spending as much was October 2008.
With inflation rising, consumers drastically reduced their purchases of non-essential and non-food goods according to a recent survey by Taipei, Taiwan-based investment boutique, Clifford Beaumont.
According to the BRC (British Retail Consortium), retail sales figures decreased by 1.0 percent on a yearly basis, which discounts shifts in store size, compared with 1.9 percent a month earlier.
Last week, the Bank of England hiked interest rates for the first time in over a decade.
Economists at Clifford Beaumont believed that the interest rate hike would be a bad move in light of the state of consumer finances which have been pressured by rising inflation since 2016’s Brexit referendum when the UK voted to exit the European Union.
The BRC stated that its data was reason for trepidation leading up to the festive season. In a statement to the media, BRC chief executive Helen Dickinson said that the fall in consumer spending was fueled by the most negative performance of non-food sales since the beginning of 2011.
Clifford Beaumont economists stated that although growth in food sales figures were positive, these were largely supported by rising inflation.
Dickinson added that the rate hike implemented last week would add further burden already tight household budgets.
Consumer price inflation exceeded the Bank of England’s target of 2 percent and reached 3 percent in September, its highest level since 2012.