Olympics optimism boosts spending

August saw a monthly growth in household spending of 0.7 per cent. Clothing and footwear retailers also witnessed a growth of 0.7 per cent, whilst hotels and restaurants saw a growth of 2.8 per cent, according to new figures from Visa's monthly UK Expenditure Index.

Olympic events appear to have drawn people away from online shopping, which in comparison to last year registered a reduction of 9.3 per cent.

The Index, which is published on a monthly basis, uses card spending data and adjusts it for a variety of factors to create a like-for-like comparison of consumer spending.

Spending still remains down on the same period last year, but Dr Steve Perry, Commercial Director at Visa Europesaid retailers have "cause to be hopeful".

"Headline monthly growth of 0.7% underplays the strength of retail sales which were undermined by weaker services spending," he said.

Miscellaneous goods and services were the principal drag on overall consumer spending, faring particularly poorly, with a reduction of 17.2 per cent.

Chris Williamson, chief economist at Markit, the financial information services company which compiles the data, said the latest Index "re-affirmed separate data from business surveys of a relative bounce in the performance of the UK economy during August."

"Fingers will be crossed that August provides a springboard for a positive end to the year, especially as the crucial Christmas shopping season will soon be upon us," he said.