Snow puts freeze on spending in weakest month for five years

Snowed-in British shoppers left the plastic alone in March after the weakest month for consumer spending in more than five years, worrying figures showed on Tuesday.

In a period blighted by blizzards across much of the country the Bank of England’s latest data showed just £254 million spent on credit cards and personal loans over the month, the lowest since November 2012.

The figures came as more sluggish signs from UK manufacturers in April left the chances of a Bank of England rate hike next week “increasingly remote”, according to economists, pushing the pound to a four-month low.

The Bank’s lending data showed overall growth in consumer credit rising at just a fifth of the £1.5 billion average of the past six months. The £129 million spent on cards alone was the weakest since April last year, driving the 1.2% slump in retail sales over the month already revealed by the Office for National Statistics.

ING Bank’s James Smith warned: “With real incomes barely rising, such a sharp fall in consumer credit does not bode well for either the high street or the overall growth outlook.” The figures also offered more evidence of a cooling housing market as mortgage approvals fell more than 1% to 62,914.

The pound dropped nearly a cent below $1.37 as the Chartered Institute of Procurement & Supply’s latest snapshot showed fresh clouds over manufacturing. Its activity index, where a score over 50 signals growth, fell to 53.9 in April, the weakest for 17 months.

IHS Markit economist Rob Dobson said: “While adverse weather was partly to blame in February and March, there are no excuses for April’s disappointing performance, making the chances of a near-term hike in interest rates increasingly remote.”

Official estimates showed the economy growing 0.1% in the first quarter, the weakest performance since 2012.