UK November Consumer Spending Disappoints Amid Budget Anticipation and Economic Uncertainty

The Reuters report [1] details significant weakness in UK consumer spending in November 2025. Barclays data shows a 1.1% annual decline in card spending (survey period: October 25–November 21), while the British Retail Consortium (BRC) recorded 1.4% retail sales growth, the slowest rate since May. Black Friday sales, a critical driver of late-November spending, also disappointed retailers [1].
This slowdown is contextualized by broader economic conditions: October CPI inflation remained elevated at 3.6% [2], while regular pay growth reached 4.6% year-on-year [3]. The resulting real pay growth (adjusted for inflation) weakened to just 0.5% in the July–September period [4], eroding household purchasing power. The UK job market has also loosened, with declining job vacancies and slowing employment growth [3], further reducing consumer confidence.
Consumer caution was amplified by anticipation of Chancellor Rachel Reeves’ budget (announced November 27), as households delayed spending decisions to assess potential policy changes [1]. The CBI also reported retail confidence at a 17-year low in November [1], reflecting industry concerns about ongoing demand weakness.

1. Multi-factor consumer caution
   : The spending slowdown is not isolated to a single cause but reflects the confluence of inflation, weak real pay growth, a softening job market, and budget-related uncertainty—creating a “perfect storm” of consumer restraint.
2. Persistent demand weakness
   : November’s decline follows weak retail sales in October [1], indicating a sustained trend rather than a temporary blip. Real pay erosion (a long-term challenge) is a critical underpinning, as wages outpace inflation by only 0.5% [4], limiting discretionary spending capacity.
3. Policy implications
   : The Bank of England’s expectation of falling inflation [3] may intersect with this spending slowdown, potentially increasing pressure to cut interest rates to stimulate economic activity.

• GDP growth threat
  : Consumer spending accounts for ~60% of UK GDP, so sustained weakness could drag on overall economic expansion.
• Retail sector pressure
  : Lower sales volumes and disappointed Black Friday results may squeeze retail profit margins, particularly for businesses with thin operating buffers.
• Spending continuation
  : If budget measures do not address household cost-of-living concerns, consumer caution could persist into the critical festive shopping season.

• Monetary policy support
  : The Bank of England may consider rate cuts to reduce borrowing costs and encourage consumer spending [0].
• Retail adaptation
  : Weak November results provide early signals for retailers to adjust festive season strategies (e.g., targeted promotions) to stimulate demand.

• Spending data
  : Barclays card spending -1.1% year-on-year; BRC retail sales +1.4% (slowest since May); Black Friday sales disappointed [1].
• Economic context
  : October CPI inflation 3.6% [2]; regular pay growth 4.6% year-on-year [3]; real pay growth 0.5% (July–Sept 2025) [4]; loosening job market [3].
• Timelines
  : Budget announced November 27; survey periods: Barclays (Oct 25–Nov 21), BRC (Nov 2–29) [1].
• Information gaps
  : November inflation data, detailed breakdown of spending categories, Black Friday sales comparison to previous years.