Consumer spending growth slowed sharply to 1.6% in March 2016, the lowest level in two years. March’s poor performance dragged down Q1 growth to 2.8%, its lowest figure in seven quarters.
Brits lacking in confidence
The last few months have seen a wave of unsettling news, from volatile oil prices to the collapse in the value of the pound, falling global stock markets and the potential impact of the EU referendum.
These external factors have caught up with consumers and their confidence in both the global and UK economies and their own financial security has waned. Only one in three (34%) Brits feel upbeat about the UK economy, fewer than at any time since we began collecting this data in Q3 2014.
As nearly half (45%) of consumers say they are more worried about the cost of everyday items than they were this time last year, it’s no surprise that non-essential spend growth slowed to 2.0% in March, its lowest rate since 2014. Only a quarter (26%) of consumers believe that their spending power will go up this year.