UK consumer spending eyed higher in October ahead of Christmas? BRC

UK consumers expect to spend more and save less in October as the Christmas season is drawing closer, data published by the British Retail Consortium and Opinium showed Wednesday.

The index for the state of the economy edged up a notch to minus 35 in October from minus 36 in September.

The personal financial situation index worsened to minus 11 in October from minus 7 in September.

The personal spending on retail index rose to plus 14 in October from plus 5 in September, while the index for personal spending overall climbed to plus 18 in October from plus 14 in September.

Finally, the personal saving index fell to minus 9 in October from a neutral 0 in September.

Helen Dickinson, chief executive of the British Retail Consortium, said: ‘With Christmas now around the corner, expectations of spending, particularly on retail goods, rose sharply, with a corresponding drop in expected savings.

‘This effect was pronounced among Millennials and Gen X, the generations most likely to have children living at home. Worries about the cost of Christmas, coupled with concerns about potential tax rises in the upcoming Budget are likely to have contributed to the drop in sentiment around personal finances, which fell into double digits for the first time since May.

‘While the prospect of Christmas may have boosted expectations of grocery spending, the general rise in food prices has meant many families are struggling with the rising cost of living. Retailers are doing what they can to limit price rises, but high costs from the last Budget – including increased employment and packaging taxes – are still filtering through into inflation.

‘The Budget is an important opportunity to relieve some of these cost pressures – particularly the disproportionate burden of business rates on the retail industry. ’

The survey features a sample of 2,000 adults in the UK, with the responses weighted assigned a net score. The responses were collected between October 7 and 10.

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