What's going on?
The fabled “Beast from the East” that pummeled the UK with rain, wind and snow last month also had a depressing effect on consumer spending, according to data out on Tuesday.
What does this mean?
According to major credit card provider Barclaycard, monthly spending growth in the UK in March slowed to its lowest level in almost two years. A third of Brits said the stormy weather caused them to buy less from physical stores and shop online instead. Thanks to the ultra-competitive prices offered by several ecommerce companies and tighter borrowing conditions recently, consumers may have ended up spending less overall.
March wasn’t all doom and gloom, however. An early Easter public holiday at the end of the month gave grocery retailers a helpful bump, with the entire sector growing 2.5% compared to last year as consumers stocked up on food and drink.
Why should I care?
For you personally: UK household confidence is high, but discounts remain important.
Consumers appear to have adjusted their budgets after initial worries about Brexit’s effect on prices (a relatively strong pound so far this year may also have helped); right now, two thirds of households feel good about their finances. At the same time, an influential survey of shoppers found that almost half of them always buy the cheapest product, even if it takes longer to find than a more expensive one (up from 40% last March).
The bigger picture: Consumer spending paints a mixed picture in Europe and the US.
In Germany, growth in retail spending is likely to be slow in 2018, despite relatively buoyant consumer sentiment (leisure spending, though, is likely to be strong). Consumer spending in France, Europe’s third-largest economy, started the year slowly but has since picked up, contributing to an increase in the outlook for 2018 growth. In the US, meanwhile, consumers increased their spending only slightly in January and February – they’re not yet spending the benefits of recent tax cuts, potentially assuaging concerns that this would lead to the US economy overheating.