Consumer spending increases on the year in October
- Month-on-month consumer spending decreased by -1.6% in October, following a modest increase in September (+1.5%).
- Year-on-year spending increased in October (+0.3%), following a moderate decrease in September
(-1.2%).
- Quarterly spending figures signalled increased expenditure in October (+0.7%), and was the first improvement in underlying expenditure since May.
- Non-seasonally adjusted year-on-year expenditure increased through both Online (+2.9%) and Mail/Telephone Order (+6.4%) spending channels, but decreased in Face-to-Face categories (-1.7%).
Jeremy Nicholds, Director of Commercial Development at Visa Europe said:
“For the first time since May, underlying trends in consumer spending returned to growth in October, with the quarterly measure of spending registering a +0.7% increase. This good news was bolstered by a modest +0.3% increase in annual consumer spending in October. However, monthly consumer spending remains volatile, borne out by a -1.6% decrease, as consumer confidence remains fragile amid fears over inflation and energy bill rises.
“With just a month to go before the crucial Christmas trading period begins with Mega Monday, online spending registered robust annual growth in October (+2.9%). Spending on the High Street remains subdued, with a decline of -1.7% on the year. Declines in annual spending trends in Food Beverages (-4.5%) and Clothing Footwear (-5.7%) demonstrate the challenges that still remain for retailers and consumers alike with just eight weeks until the end of the year.”
Paul Smith, Senior Economist at Markit said:
“Following two months of solid growth, a minor set-back for UK consumer spending in October with expenditure a little down on the month. Nonetheless, a return to modest expansion on the annual measure and a solid rate of quarterly growth continues to sit nicely with other indicators of economic activity, which have pointed to a clear improvement in the UK economic climate during recent months.
“Latest data painted a mixed picture at the sector level. On the one hand, spending showed an improvement in areas such as eating out and recreational activities. But retailers in Food Drink and Clothing Footwear are having less joy, with expenditure in these sectors down on the year. Such trends provide a timely reminder that the majority of households remain in a cautious mood following a sustained period of wage stagnation and rising living costs, with any usage of discretionary spend being carefully managed.”
