British consumer spending slowed in February, losing momentum after a strong start to the year, despite growing confidence in personal finances and the broader economy.

According to the British Retail Consortium (BRC), retail sales at major chains rose 1.1% year-on-year, down from January's 2.6% growth, which had been boosted by post-holiday discounts. BRC chief executive Helen Dickinson attributed the slowdown to weak demand for spring fashion due to cold weather and concerns over rising business costs. She warned that new employer social security and packaging taxes set for next month could lead to higher prices or reduced investments in jobs and stores.

Government plans to tighten employment rules for new hires could also deter retailers from hiring entry-level staff, Dickinson noted, urging policymakers to address exploitative employment practices instead.

Data from Barclays showed overall consumer spending -- including non-retail categories -- rose by just 1.0% in February, down from 1.9% in January. However, household confidence in personal finances reached a record high of 75%, with many consumers prioritizing savings. Confidence in the broader economy also improved but remained low at 25%.

Barclays' spending data, based on debit and credit card transactions from January 25 to February 21, and a survey of 2,000 people from February 21-26, highlighted shifting consumer behavior. Meanwhile, the BRC report covered sales from February 2 to March 1.

Retailers face mounting challenges, from slow spending growth to rising costs and regulatory hurdles. As businesses brace for upcoming policy changes, the industry remains under pressure to balance pricing strategies, investment, and workforce management.