Heatwave Boosts UK Retailers But Concerns Mount Over Rate Hike

The sweltering summer drove Britons to splurge on food, drink and days away but the boost to retailers may prove short-lived, with higher interest rates expected to hit already fragile consumer confidence, surveys published Tuesday found.

Payments processor Barclaycard said that spending rose an annual 5 percent in July, capping the strongest three-month period since it started measuring the data in 2014. Spending was also boosted by the England soccer team’s best World Cup run for 28 years.

Summer Splurge

U.K. consumer spending grew over 5% for a third month, Barclaycard says

Source: Barclaycard

However, households’ confidence in their finances fell sharply, Barclaycard warned. Meanwhile, a separate report by the British Retail Consortium and KPMG showed same-stores growing just 0.5 percent from the year earlier as the strongest July for food sales in five years came at a cost elsewhere.

“Sales of non-food products struggled,” BRC Chief Executive Helen Dickinson said in a statement. “Three months into an extended period of summer weather, demand for many seasonal purchases has slowed while the heat has kept shoppers away from days spent browsing new ranges. For many in the industry, Autumn could not come sooner.”

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