UK Consumer Spending Rises Amid Warmer Weather and Higher Food Prices

UK consumers boosted spending in July due to warm weather, with clothing sales rising 4.2%, but overall spending growth slowed to 1.4% compared to July last year. Food spending increased 0.9%, driven by higher prices rather than improved demand. Economists are monitoring consumer behavior as job losses and slowing wage growth raise concerns.

UK consumers increased their spending in July, with clothing sales surging by 4.2% due to unusually warm weather at the start of the month. However, overall spending growth slowed to 1.4% compared to July last year, according to data from the British Retail Consortium (BRC) [1].

The BRC reported that spending was 2.5% higher in cash terms than in July 2024, slower than the 3.1% increase seen in June. Separate figures from Barclays showed that overall consumer spending rose by 1.4%, compared to a fall of 0.1% in June [1].

Food spending increased by 0.9%, driven more by higher prices than improved demand. The BRC noted that food sales did well in early July due to warm weather and a packed sporting schedule, but this momentum failed to hold for the rest of the month. The BRC’s measure of food spending rose by 3.9% in July compared to a 1.4% increase for other goods [1].

Barclays’ figures showed a 0.9% increase in grocery spending and a 4.2% rise in clothing sales, the largest increase since September last year, which they attributed to the warm weather [1].

Britain’s Met Office confirmed that July 2025 was the fifth-warmest in records dating back to 1884 [1].

Economists are watching to see if households dip into high savings levels to support spending at a time of job losses and slowing wage growth. Bank of England Governor Andrew Bailey last week noted that consumers had been more cautious than expected [1].

The BoE forecast that consumer price inflation will rise to 4% in September, double its 2% target, while food price inflation is predicted to peak at 5.5% by the end of the year [1].

Around 1-2 percentage points of the increase in food price inflation was due to a higher minimum wage and increased employers national insurance contributions ordered by British finance minister Rachel Reeves, according to the BoE [1].

References:
[1] https://kdal610.com/2025/08/11/uk-consumers-spent-more-on-clothes-as-temperatures-soared-in-july-data-shows/