Brits are battering down the hatches in preparation for rampant inflation hitting their finances, reveals fresh research published today.
Around nine in 10 households are concerned about the impact rising food prices and overall inflation will have on their ability to maintain spending levels, according to Barclaycard.
The research was carried out before the Russia-Ukraine crisis sent energy prices soaring, indicating even more Brits are likely to be worried about the impact high inflation will have on their living standards in the coming months.
Some economists expect the cost of living to top nine per cent in October as a result of the energy watchdog hiking the cap on prices a further 55 per cent to account for the surge in oil and gas prices.
Forecasters have been slashing expectations for economic growth due to concerns over a pullback in consumer spending as a result of higher prices.
Yesterday, gas futures climbed to their highest level ever.
Around half of consumers are now buying budget items at supermarkets to reduce the cost of their weekly shop, Barclaycard said.
“As inflation starts to have an impact on consumer confidence, we’re seeing a shift in spending habits as Brits seek more value from their purchases, particularly on supermarket shopping, which saw its smallest growth since February 2020,” José Carvalho, head of consumer products at Barclaycard, said.
Despite the swelling cost of living, consumer spending jumped 13.7 per cent last month, driven by the end of Plan B restrictions and Valentine’s Day prompting households to head back out and socialise.
Spending on non-essential items rose at the quickest rate since last November, while clothes purchases climbed 15 per cent.
Fuel purchases advanced over 11 per cent, partly the result of higher petrol prices and workers heading back to the office after working from guidance was scrapped.