British shoppers reigned on their purse strings last month as rainy weather again hampered their appetite for spending, according to two surveys published on Tuesday.
Barclays said spending on its credit and debit cards fell by 0.3% in annual terms in July, the second drop since February 2021, albeit a less sharp one than June's 0.6% decrease.
The England men's soccer team's run to the final of the Euro 2024 tournament boosted spending in pubs and people stocked up for barbecues on July's sunny days, Barclays said.
However, two in five people who took part in a Barclays survey said they spent less due to rainy weather during the month. The drop in spending contrasted with price growth, which is running at about 2%, according to official inflation data.
The British Retail Consortium reported a 0.5% rise in sales values from July 2023. That compared with a 0.2% fall in June but was below an average increase of 1.4% over the past 12 months.
Both surveys showed a fall in nonessential spending.
Jack Meaning, Barclay's chief U.K. economist, said that behind fluctuations caused by the weather, sports events and concert tours by stars such as Taylor Swift, the bigger picture was one of a recovery in spending power and consumer confidence.
"This, coupled with the fact that the Bank of England has begun to reduce interest rates, should translate into stronger underlying spending growth as we move through the second half of this year and into 2025," Meaning said.
Britain's economy emerged in early 2024 from a brief and shallow recession in the second half of last year and is expected to grow by 1.25% over 2024 as a whole, the Bank of England (BoE) said last week, potentially outpacing France, Germany and Italy.
New Prime Minister Keir Starmer has said he will aim to double that pace of economic growth.
The Barclays survey showed that confidence in the U.K. economy hit its highest since February 2022. However, respondents became less confident about their household finances, and a third expressed concern about a rise in water utility bills announced in July.
