UK retail spending recovers despite high inflation

British shoppers’ spending rate climbed in October despite worries over worsening inflation.

Based on a survey conducted by the British Retail Consortium published on Tuesday, retail spending jumped 1.3% from a year ago in October. This was  arecovery from September’s 0.6% decline amid a panic-buying on fuel caused by a shortage of tanker drivers.

The Bank of England earlier projected that rising prices would hurt consumer demand, providing an inflation forecast of almost 5% in April 2022. The calculation came as supply chain bottlenecks and surging energy prices continue to disrupt production.

Paul Martin, UK head of retail at KPMG, said shopping discount during the Christmas season was unlikely due to “strong pricing dynamics” driven by limited availability of stocks.

Meanwhile, a survey by card payments firm Barclaycard on broader household spending highlighted a 14.2% surge in consumer spending since October 2019.

Spending on entertainment, digital subscriptions, and travel all contributed to the increase.