UK shoppers keep on spending more on food as inflation bites-BRC

LONDON, March 6 (Reuters) - Britain's shoppers spent more on food in the three months to February and once again cut back on non-essential purchases as the rise in inflation after the Brexit vote of 2016 squeezed their spending power, a survey showed on Tuesday.

The amount of money spent with retailers in February rose by 1.6 percent compared with a year earlier, slightly above the pace of growth seen in the previous three months, the British Retail Consortium (BRC (Shanghai: 600466.SS - news) ) said.

"The fact is that consumers want to spend, they just don't have the resources to do so," BRC Chief Executive Helen Dickinson said.

Non-food sales in the three months to February were 0.5 lower than a year earlier, while food sales grew 4.0 percent.

"With (Other OTC: WWTH - news) the upward pressure on prices from the fall in the pound now starting to subside we expect to see some loosening of the squeeze on spending on non-essentials, but it's likely to come slowly," Dickinson said.

On a like-for-like basis, which does not include spending at newly opened stores and strips out the effect of closures, spending in February was 0.6 percent higher than a year earlier.

Payments firm Barclaycard told a similar story to the BRC on Tuesday, saying its card users increased their spending by more than the rate of inflation for a third month in a row, but many had to tweak their budgets to leave cash for "nice-to-haves".

Overall consumer spending rose by an annual 3.8 percent, slightly down from January's increase of 3.9 percent and driven by spending on activities such as going to the cinema or the theatre which bounced back after falling for five months.

Barclaycard Managing Director Paul Lockstone said Britain's negotiations to leave the EU were likely to keep weighing on consumer confidence.

"Consumers are cautious about the potential ramifications of whatever settlement the UK achieves and half of us fear that the outcome will leave us worse off than we are now," he said.

Households in Britain have been hit by a rise in inflation to above 3 percent in late 2017 while wages have grown more weakly. However, the Bank of England and many private economists expect wages to pick up and overtake inflation later this year.

Jobs listings site Adzuna said the average salary for jobs advertised in January hit 33,369 pounds ($46,079), the highest in nearly two years, and were up in every area in the United (Shenzhen: 000925.SZ - news) Kingdom for first time since Adzuna began regional tracking in mid-2015.

"Without wishing to tempt fate, it does look like the worst of the pay squeeze seems to have passed," Adzuna co-founder Doug Monro said. ($1 = 0.7242 pounds) (Reporting by Elizabeth Burden Writing by William Schomberg)