Consumer spending strengthened across all three expenditure channels - online, face to face and mail or phone orders - with a strong increase of more than 2% recorded in online annual spending.
Stephen Williams MP, Liberal Democrat spokesman on the economy, welcomed the news of rising consumer spending.
“These figures are an encouraging sign that consumers have growing confidence that the economy is on the mend,” he said.
“With unemployment falling and more people in work than ever before, all the economic indicators are heading the right way.
“But there is no room for complacency and I want the government to do more to get a spurt in house building to provide more jobs and much needed homes for young people.”
The Visa UK Expenditure Index uses card transaction data to provide a robust indicator of total consumer expenditure across all payment methods.
Last month it registered 2.1% growth while month-on-month spending is up for the second successive month.
Year-on-year spending increases for the fourth consecutive month in June, the strongest annual increase since October 2010.
However, depressed spending in April has a drag effect on the quarterly spending figures which registers at -0.5% in June.
Dr Steve Perry, Commercial Director at
Visa Europe, said:
“Spending has strengthened across all expenditure channels with a particular bounce in online spending, which is up 2.1% on last year.
“There is additional good news for the high street as there has been a halt to falling sales in the clothing and footwear sector following six months of negative growth.”
The second monthly increase in household expenditure during June means consumer spending has risen in every month so far this year with the exception of April.
Visa Europe’s UK Expenditure Index monitors eight broad sectors.
Spending increased in four of the eight broad categories in June.
Household spending increased solidly in the Miscellaneous Goods and Services category, which includes spending on personal care, personal effects and financial services.
Expenditure also increased solidly in Hotels and Restaurants, Transport and Communication and marginally in Household Goods.
Meanwhile, spending fell solidly in Health and Education and slightly in Food, Beverages and Tobacco and Recreation and Culture.
Expenditure on Clothing & Footwear was flat in June, after six months of reductions.
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 1.9 billion 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.
These adjustments mean that these data are distinct from Visa Europe’s business performance and the Index reflects overall consumer spending, not just that on cards.
Chris Williamson, Chief Economist at Markit, said:
“The estimated 2.4% growth in expenditure in the first half of 2013 represents a marked improvement on the reductions seen in 2012 and 2011, and adds to the picture of an economy that is reviving steadily.
“Increased household spending also corresponds with an upturn in consumer confidence, which we can link in turn to brighter news on the economy from the business surveys, with people being busier at work and earning more, plus rising house prices.
“Ongoing improvements in these drivers of consumer confidence suggest that spending should continue to rise as we move into the second half of the year."