The London Eye wheel and Shard skyscraper are seen from Hyde Park in London, Britain, May 11, 2018. — REUTERS/TOBY MELVILLE

LONDON — A heat-wave prompted British shoppers to spend more on summer clothes, food for picnics and air conditioning units in July but they also cut back on foreign travel and dining out as the cost-of-living squeeze tightened, surveys showed on Tuesday.

The British Retail Consortium (BRC) said the value of total sales at its members — mostly large chains and major supermarkets — was 2.3% higher than in July 2021, a contrast with falls in each of the previous three months.

Like-for-like sales, which adjust for changes in floor space and shops closed due to lockdown restrictions, rose 1.6% after falling for four months.

However, the figures are not adjusted for inflation and the BRC said they represented a fall in volume terms.

“Consumer confidence remains weak, and the rise in interest rates coupled with talk of recession will do little to improve the situation,” BRC chief executive Helen Dickinson said.

The two remaining contenders to become Britain’s next prime minister — foreign minister Liz Truss and ex-finance minister Rishi Sunak — are both promising to help households either via tax cuts or direct support to help meeting surging power bills.

Last week the Bank of England said Britain’s economy was on course to fall into recession at the end of this year and only emerge from it in early 2024.

Figures from payments processor Barclaycard also contrasted with the prevailing gloom over the economy.

Consumer spending in July was 7.7% higher than a year earlier, pushed up by sales of clothing, beauty products and staycations as well as a 44% leap in utilities and a 30% leap on fuel, Barclaycard showed.

Consumers were starting to cut back on overseas travel and eating and drinking out to compensate for inflation’s hit.

But Barclaycard said a survey it conducted showed consumers were feeling a bit more confident about their household finances — 66% vs 59% in June — albeit at levels lower than a year ago.

“This shows that, faced with difficult circumstances, many are finding ways to budget and manage their finances successfully, to cope with ongoing inflationary pressures,” Jose Carvalho, Head of Consumer Products at Barclaycard, said. — Reuters