Household expenditure strengthens in November
- Month-on-month consumer spending increased by +1.0% in November, following a modest decline in October (-1.4%).
- Year-on-year spending rose at the second-strongest rate for over three years (+1.5%), following a slight increase in October (+0.5%).
- Quarterly spending figures signalled that underlying expenditure improved at the strongest rate for seven months (+1.1%), following an increase in October (+0.8%).
- Non-seasonally adjusted year-on-year expenditure increased across all three monitored spending channels in November: Face-to-Face (+1.3%), Online (+1.0%) and Mail/Telephone Order (+2.6%).
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.”
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. An overall annual rate of expansion of 1.5% is the best since June, and the data are consistent with the economy heading in Q4 for another quarter of least 0.8% q-o-q growth.
“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.
“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.”
