British consumers increased spending in July, driven by unusually warm weather early in the month that lifted clothing sales. However, demand eased as temperatures fell, and much of the rise reflected higher food prices rather than stronger demand.
The British Retail Consortium (BRC), representing mostly large retailers, reported a 2.5% year-on-year rise in spending in July, down from June’s 3.1% growth. Separate data from Barclays showed overall consumer spending up 1.4% in July, compared with a 0.1% decline in June.
Barclays reported a 4.2% jump in clothing sales — the highest since September 2023 — both linked to warmer conditions. The Met Office said July ranked as the fifth-warmest since records began in 1884.
Economists remain watchful to see if households will draw on high savings to sustain spending amid job losses and slowing wage growth. Bank of England (BoE) Governor Andrew Bailey recently noted that consumers had been more cautious than expected. The BoE forecasts inflation will climb to 4% in September, double its 2% target, partly due to higher minimum wages and increased employer national insurance contributions introduced by Finance Minister Rachel Reeves.
