Online spending increased sharply, by 4.8%, but consumers also bought more in-person too, albeit at a more moderate 1.4% rate of increase, according to the
Visa EuropeUK Expenditure Index figures for January.
Year-on-year spending rose 1.5%, following a slight increase on the year in December of 0.8%.
Month-on-month consumer spending increased at the quickest rate since September 2012 in January at 1.8%, while quarterly spending figures signalled that underlying expenditure was relatively unchanged.
Jonathan Portes, Director at the National Institute of Economic and Social Research, said:
"These figures are consistent with the picture - also shown in NIESR'S UK forecast, to be published on Friday - of a steady, but so far consumer driven, recovery."
Spending growth is being shared across a range of sectors with the hotel and restaurant sector up 10% last month.
Consumers also restocked on household goods, bought more clothing and footwear and spent further on recreation and culture.
There was a decline in spending on food and drink, as well as miscellaneous items like hairdressing and jewellery.
Jeremy Nicholds, Director of Commercial Development at Visa Europe, said:
“We’ve seen no evidence of a New Year hangover on consumer spending, with a robust start to 2014. A solid increase in year-on-year spending in January of 1.5% is encouraging, while month-on-month spending accelerated at the quickest rate since September 2012. Online spending again increased sharply, by 4.8%, but consumers also bought more in-person too, albeit at a more moderate 1.4% rate of increase.”
Visa Europe’s UK Expenditure Index takes card spending data and adjusts it for a variety of factors to create a like-for-like comparison of consumer spending. This distinguishes the Index from Visa’s corporate performance, and thereby provides a robust indicator of consumer spending habits.
Paul Smith, Director at Markit, said Visa Europe: UK Expenditure Index figures in January provide further evidence of “a markedly improving British economy at the start of 2014”.
“Against a backdrop of falling joblessness and robust economic growth, consumer confidence has surged and underpinned a continued improvement in expenditure,” he said.
“A cautionary note, however, is that spending volumes still remain down on pre-financial peaks, and sustained growth remains highly dependent on a reversal of the real-wage squeeze that has been evident in recent years.”