Britain’s tough new lockdown measures have dented consumer confidence and reduced spending to levels not seen since last spring, according to two separate surveys. Both the British Retail Consortium and Barclaycard said spending in January was at its weakest since May as booming online activity failed to compensate fully for the closure of stores. One of Britain’s leading thinktanks, the National Institute of Economic and Social Research (NIESR), added on Monday that after the UK’s sluggish start to 2021 it had cut its forecast for growth this year and put back the start of the recovery. Barclaycard said consumer spending last month was down by more than 16% year-on-year, while the monthly BRC/KPMP retail sales monitor showed that 63% of all non-food shopping took place online in January – a doubling from the 31% seen a year previously. Helen Dickinson, the BRC’s chief executive, said: “January saw retail sales growth decline to its lowest level since May of last year. The current lockdown has hit non-essential retailers harder than in November, with the new variant hampering consumer confidence and leading customers to hold back on spending – especially on clothing and footwear.” Raheel Ahmed, Barclaycard’s head of consumer products, said: “As the impact of the latest lockdown start to takes its toll, we’ve seen particular sectors struggle, as physical premises across the UK were forced to close. Last month’s glimmer of hope for the travel sector also seems to have stalled as tougher border controls saw bookings drop.” In its quarterly update, the NIESR said it now expected the economy to grow by 3.4% in 2021 compared with the 5.9% it had been expecting in November. The NIESR said the UK would be one of the weakest advanced economies in the first three months of 2021. It believes unemployment will rise sharply after the government’s furlough scheme ends in April and will reach 2.5m – or 7.5% of the workforce – by the end of the year. “To prevent a rise in unemployment of the magnitude of the forecast, and to limit the economic and social ‘scarring’ from the public health crisis, the chancellor should soon announce policies to support the labour market beyond April,” it said. The thinktank was less optimistic than the Bank of England about the time it would take for the economy to recover fully from the pandemic, predicting that it would take until late 2023 before output was back to the level reached in the fourth quarter of 2019. Last week, Threadneedle Street said it envisaged a return to pre-Covid 19 levels by the start of 2022 but the NIESR said uncertainty about future variants of the coronavirus, continued physical distancing, more trade barriers with the EU as a result of Brexit and the weakness of productivity in the years before the pandemic would mean only a gradual recovery. Hande Küçük, a NIESR deputy director, said it would take time to make up the lost ground, just as it had after the global financial crisis of 2008-09 when it took five years to return to the pre-recession peak.