Visa Europe has also predicted that £450m was spent online on 'Mega Monday' earlier this week, the UK’s busiest online shopping day. Transactions are expected to top 7.7m, making 2 December the busiest online shopping day ever.
Improving household expenditure trends coincide with other recent positive economic data flow, including the further expansion of GDP in Q3. Consumer confidence has also climbed to record highs in recent months, fuelling expectations for increased expenditure in the months ahead.
The Visa UK Expenditure Index uses card transaction data to provide a robust indicator of total consumer expenditure across all payment methods.
Figures for November, released ahead of the Autumn Statement today, show growth in both the high street and online.
Commenting on the new figures, a HM Treasury spokesperson said:
"Today's figures provide more evidence that the government's long-term economic plan is working, with the economy growing, the deficit falling and jobs being created. But the job is not done and the government will go on taking the difficult decisions needed to secure a responsible recovery for all".
An overall annual rate of expansion of 1.5% is the best since June, and the data is consistent with the economy heading in Q4 for another quarter of growth.
Jeremy Nicholds, Director of Commercial Development at
Visa Europe, said:
“Consumer spending in November culminated in one of the strongest periods of growth this year, laying the ground for what retailers hope will be a good December.
"For the first time in six months, consumer spending registered simultaneous increases across monthly (+1.0%), quarterly (+1.1%) and annual (+1.5%) figures, a clear indication of the continuous improvement in consumer confidence.
"Indeed data from the Index showed that spending strengthened in the final weeks of November, signalling that consumers are getting ready for Christmas with just a few weeks left to go.
"Of particular note is the improvement in face-to-face purchases which increased by +1.3%, whilst online spending continued its positive run by registering annual growth of +1.0% which was bolstered by a very strong Black Friday.
"Spending in five of the eight categories monitored also entered positive territory for the first time since June, providing retailers with long sought hope that this Christmas might indeed have been worth the wait.”
The Visa UK Expenditure Index is based on spending on all Visa debit, credit and prepaid cards which are used to make an average of over 1.9bn transactions every quarter and account for £1 in £3 of all UK spending.
Working with Markit, card spending data figures are adjusted for a variety of factors such as card issuance, changing consumer preferences to pay by card rather than cash and inflation.
Paul Smith, Senior Economist at Markit said:
"November’s UK Expenditure Index turned in a notable performance, with growth recorded on the high street and online.
"Perhaps the most encouraging aspect of the latest report is the broad-based nature of the upturn.
"Colder weather in late November had a clear boost for clothing retailers, with growth of 5.5% the best for over a year, while the recent upturn in the housing market is benefiting DIY and household goods stores.
"Spending associated with recreation & culture also seemed to be high on consumers’ agenda, with this area seeing noticeable growth over the month."
He added:
“Although spending still remains below volumes seen prior to the financial crisis, the latest data subsequently raises hopes that the constraints endured by consumers in recent years are finally starting to unwind."