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Brexit price hikes deter British shoppers

Tuesday, March 07, 2017 - 01:42

The spending power of households is being stretched by the fall in the value of the pound since Britain's referendum decision in June to leave the European Union and by a rise in global oil prices. As Sara Hemrajani reports, grocery inflation has also doubled since February.

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Signs of penny pinching by British shoppers. The latest numbers showing consumer spending falling as inflation - fuelled by sterling's weakness over Brexit - puts pressure on incomes. The British Retail Consortium says it recorded the first quarterly fall in non-food sales in more than five years. That's as people think twice about snapping up new clothes, electronics and other luxury items. (Soundbite) Rachel Lund, Head of Insight and Analytics, British Retail Consortium, saying (English): "Primarily it's to do with inflation and the impact of the currency devaluation and commodity price rises feeding through into prices, and that has squeezed real wages and is continuing to do so, which means actually households have less money to spread across all the things they buy." The data comes out a day before finance minister Philip Hammond unveils his Spring Budget. Some analysts warn the government's confidence in the resilience of the British consumer may be misplaced. (Soundbite) Vicky Pryce, Chief Economic Advisor, CEBR, saying (English): "What the forecasts are - particularly the Bank of England's one about quite substantial growth this year again in the UK were about two percent - is that consumers are going to be prepared to dip into their savings more and, therefore, borrow more and they will carry on spending. Now that is a big, big assumption to make and actually what we're already seeing is that consumers are much less willing to go out and buy anything in the shops." Another concern - rising supermarket bills. UK food inflation has doubled since last month, meaning shoppers may consider tightening their purse strings even further.

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Brexit price hikes deter British shoppers

Tuesday, March 07, 2017 - 01:42