George Osborne has been given a warning about the health of the economic recovery ahead of the Autumn Statement after new data showed sluggish consumer spending in November.
The latest MasterCard Spending Pulse, which tracks retail sales based on spending on its cards, cash and cheques, shows that retail sales grew by just 1.5pc in November, below the rate of inflation.
The data suggest that consumers remain reluctant to spend in the run-up to Christmas and highlights why many retailers were happy to offer heavy discounts on “Black Friday”, which is a US tradition.
Despite the UK economy returning to growth and economists becoming positive in their outlook, concerns about consumer confidence remain. Household income is still being squeezed, with shop prices rising faster than wages.
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The 1.5pc sales growth in November is below the average growth of 2.3pc recorded so far in 2013 and the 2pc average in the first 11 months of 2012.
Sarah Quinlan, senior vice president at MasterCard Advisors, said: “November’s frosty retail figures reflect a waning consumer confidence on the high streets.
“Once again though, the continued growth in the online sector is good news and, as we approach crucial spending periods in the ecommerce calendar, we are hopeful that this positive trend will boost the overall retail sector.”
Although the overall growth in retail sales was sluggish, there was good news for fashion retailers.
Companies, including Marks & Spencer, have reported disappointing sales of autumn and winter clothing as warm weather in September and early October helped dissuade shoppers from buying winter coats and jumpers. However, the MasterCard data shows fashion sales returned to growth in November after a drop in October.
Date: Dec 2, 2013