The Visa Europe UK Expenditure Index showed household expenditure rose 2% last month compared to 2013, with hotel and restaurants up 9.2% and high street sales up 2.4%.
Market analysists said the data from
Visa Europe"continues to point to a healthy rate of growth in UK consumer spending through the summer, especially on the high street, which corroborates qualitative evidence from surveys on the positive performance of the retail sector during the summer".
The 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.
August data signalled that household expenditure continued to improve, with spending rising for the eleventh successive month on an annual basis. Despite easing from July, the rate of growth remained solid overall and was one of the strongest recorded since spring 2010.
Kevin Jenkins, Managing Director UK & Ireland at
Visa Europe, said:
"This month’s 2% year-on-year rise in spending signifies the continued progress of the UK consumer economy.
"Hotels, restaurants and bars were the big winners this month and are enjoying a strong summer with August spend up 9.2% year-on-year.
"The high street overall has had a good month, bringing cheer back to bricks and mortar retailers. Consumers turned out in force with clothing and footwear performing particularly well, no doubt due to reasonable weather and end of summer sales. These factors have in turn led to a small fall in online spending."
The Expenditure Index suggests that expenditure growth in the UK remains robust, and will support a further expansion of GDP in Q3.
Paul Smith, Senior Economist at Markit said:
"Important barometers of underlying spend – clothing, food and household goods – all showed positive real gains over the month. This highlights the on-going transition of increased consumer confidence that has been evident in recent months to higher volumes of expenditure in the UK."
The sustained rise in consumer spending was supported by a backdrop of falling unemployment across the UK economy, which stands at a near six-year low, and increased consumer confidence.
Interest rates also remain at historically low levels, benefiting both consumers and businesses. The sustained squeeze on wages meanwhile appears to be easing, with inflation coming in below forecasts in July. However, consumers have yet to see a real and sustained increased in their wage packets, which continues to limit overall spending in the economy.