LONDON Shoppers in Britain clamped down on their spending in early 2017 as retail sales rose at the slowest pace since the depths of the global financial crisis nearly a decade ago, a retail industry group said on Tuesday.
In the latest sign of how consumers are reacting to rising inflation and slowing wage growth, total sales inched up by just 0.1 percent in the January-March period compared with the same three months of last year, the British Retail Consortium said.
That was the weakest growth since the three months to December 2008, the BRC said.
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Households in Britain are suffering a power squeeze from the fall in the value of the pound since the referendum decision in June to leave the European Union, and the rise in global oil prices in recent months.
Bank of England Governor Mark Carney said on Friday he would keep a close eye on fading consumer demand as he and his fellow policymakers consider whether they should raise interest rates to protect the economy against inflation.
"The pressure on prices continues to build, albeit slowly, and will inevitably put a tighter squeeze on disposable income," BRC chief executive Helen Dickinson said.
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As shoppers spent more on essentials, non-food retail sales fell by 0.8 percent on a total basis in the January-March period, the weakest three-month performance in nearly six years.
In March alone, the value of total sales fell by 0.2 percent, the first such decline since August.
On a like-for-like basis - which excludes new store openings - sales were down 1 percent, the sharpest decline since August 2015.
The figures were affected by the timing of the Easter holiday - which fell in March last year and in April this year - the BRC said.
Also on Tuesday, credit card firm Barclaycard said a 16 percent increase in spending on fuel pushed up its overall measure of consumer spending - which includes spending on things such as restaurants and hotels as well as in shops - by 4.6 percent in March compared with the same month last year.
Barclaycard also said rising inflation meant a third of consumers planned to shop more at discount stores.
Official figures due for release on Tuesday are expected to show inflation remained at a nearly three-and-a-half-year high of 2.3 percent in the 12 months to March while figures on Wednesday will probably show total wages growing by a weaker 2.2 percent, according to a Reuters poll of economists.
(Reporting by William Schomberg; editing by Andy Bruce)