18th September 2026
For much of the cost-of-living crisis, the big question was how households would cope with rising prices. The latest figures suggest that we are beginning to see an answer.
People are not necessarily stopping spending, but there are signs that they are changing what they buy, where they shop and how much they use.
Fuel is perhaps the clearest example.
The latest Office for National Statistics real-time indicators show that UK retail footfall fell by 2% in August compared with July, while seasonally adjusted debit-card spending fell by 1%. Restaurant spending fell by 2% over the month.
But the most interesting figure concerns motorists.
People appear to be buying less fuel
The ONS reports that fuel prices remained substantially higher in August than a year earlier. At the same time, the estimated quantity of fuel demanded per transaction was 11% lower than in August 2025. That does not necessarily mean that people are driving 11% less. A household might make smaller fuel purchases, fill the tank less frequently, drive more economically or combine several of these changes.
Nevertheless, the direction is significant. When the price of something rises sharply, consumers eventually have to decide whether to absorb the increase or change their behaviour.
Fuel is difficult to avoid completely. People still need to get to work, take children to school, visit family and do their shopping. But some journeys can be postponed, combined or avoided.
For households in rural Scotland, there may be considerably less flexibility. Public transport is not always a practical alternative, and distances between towns and services can be substantial.
Spending is still rising, but that does not tell the whole story
It would be wrong to suggest that Britain has stopped spending. ONS data shows that debit-card spending in August was still 4% higher than a year earlier. Entertainment spending was up 14%, transport 8%, while utilities and shopping were both up 7%.
But there is an important qualification. When prices are rising, people can spend more money while buying fewer things. Suppose a household spent £100 a week on groceries a year ago and now spends £105. That looks like a 5% increase in spending.
If the goods being bought have increased in price by 5%, however, the household has not actually increased the amount of food it is buying.
This is one reason economists look at both the value of spending and the volume of goods and services being purchased.
Supermarket shoppers are becoming more selective
The latest grocery figures provide another indication that consumers are becoming more price-conscious.
Worldpanel reported grocery price inflation of 2.3% in the four weeks to 6 September, up from 2.1% the previous month. Grocery sales increased by 2% year-on-year, but again the increase in sales value does not necessarily mean that shoppers bought 2% more food.
There are also substantial differences between retailers. Lidl's sales were up 8% year-on-year, while Ocado was up 13.3% and Marks & Spencer's food sales rose 14.8%. Sainsbury's was up 2.9% and Tesco 1.7%.
These figures have many influences and should not be interpreted simply as people abandoning one supermarket for another. But they are consistent with a market in which consumers are increasingly looking for value, promotions and particular products.
The shopping basket itself can change too. A family that previously bought a premium brand may switch to a cheaper alternative. Someone who regularly bought lunch while at work may start taking food from home. A restaurant meal may become an occasional treat rather than a weekly expense.
None of these changes is dramatic on its own. Collectively, they can make a considerable difference.
Energy bills create another squeeze
The problem is that households cannot simply cut everything. There are some expenses that are largely unavoidable. Heating the house, putting fuel in the car, paying the electricity bill and buying food all have to be fitted into the household budget.
The latest ONS figures show wholesale gas prices increased further in August, following rises in July, with continuing concerns about energy supplies and shipping routes.
For households already trying to economise, higher energy and fuel costs therefore have an effect beyond the energy bill itself.
If another £20 or £30 a week goes on petrol and heating, that is £20 or £30 which cannot be spent in the local shop, restaurant, pub, garage, leisure centre or other business.
This is where a cost-of-living squeeze can start to affect the wider economy.
The danger for the economy
Consumer spending is an important part of economic activity. If households merely pay higher prices but continue buying the same quantities, businesses may see their revenues increase even though consumers are worse off. If households begin buying fewer goods and services, however, businesses can feel the effect directly.
A restaurant loses a booking.
A shop sells fewer items.
A garage sees fewer customers.
A household delays replacing a washing machine.
A family postpones a holiday.
One household doing this makes little difference. Millions of households doing it at the same time can become an economic trend. This is why the latest figures are worth watching.
They do not show an economy in which consumers have suddenly stopped spending. They show something subtler: consumers appear to be becoming more selective.
The psychology of inflation
There is another factor which is harder to measure.
People do not necessarily react to inflation only by looking at the official inflation rate. They notice the price at the petrol pump.
They notice the supermarket bill.
They notice the electricity direct debit.
They notice the cost of heating the house.
When several of these prices rise at the same time, households can become much more cautious about discretionary spending. A family may not know exactly how much inflation has increased, but it knows that its money does not seem to go as far.
That can lead to a defensive approach to household finances. Buy less and shop around. Delay purchases and look for special offers.
Drive less and switch brands to save where possible.
Rural areas could feel the effect differently
There is a particular issue for places such as Caithness and other rural parts of Scotland. A household in a city may be able to reduce car use by taking a bus, walking to a shop or using a train.
That option is much less available to many rural households.
A journey of 20 or 30 miles may be necessary simply to access a hospital, major supermarket, employment or other services. For a rural household, higher fuel prices therefore behave rather like an additional tax on distance.
There is also the heating issue. Many rural homes are not connected to the gas network and rely on heating oil, electricity or other forms of heating. If energy prices remain elevated, rural households can have fewer opportunities to avoid the additional cost.
Are we seeing the beginning of a bigger change?
It is too early to say that Britain has entered a major consumer retrenchment. The ONS figures certainly do not show that. Debit-card spending remains above last year's level, while retail footfall is also higher than a year earlier.
But there are enough signs to suggest that something is changing. People appear to be responding to higher prices in practical ways. The amount of fuel bought per transaction is down sharply. Retail footfall weakened in August. Restaurant spending fell over the month. Grocery shoppers are facing higher prices and there are substantial differences in how individual retailers are performing.
The important question is what happens next
If energy and fuel prices settle back, households may gradually return to their previous spending patterns.
If high prices persist, however, today's small adjustments could become permanent changes in behaviour. That would matter not just to household finances but to the wider British economy.
The cost-of-living squeeze may therefore be moving into a new phase. It is no longer simply a question of how much prices have risen. It is becoming a question of how Britain changes the way it lives and spends because of them.