Strongest monthly rise in UK consumer spending in 2013
- Month-on-month consumer spending increased in August (+1.6%), following a reduction of -2.4% in July. Quickest monthly increase in household expenditure since last September.
- Year-on-year spending also increased in August (+0.8%), following a slight reduction in July (-0.1%).
- However, quarterly spending figures signalled a reduced amount of consumer spending in August (-0.5%), following a difficult July.
- Year-on-year expenditure increased across all three monitored spending channels in August: Face-to-Face +1.0%, Online +1.1% and Mail/Telephone Order categories +3.9%.
Jeremy Nicholds, Director of Commercial Development at Visa Europe said:
“Consumer spending was buoyant in August with expenditure increasing +1.6% compared to July. This represents the strongest monthly increase in consumer spending for nearly a year. The year-on-year trend is also positive with an increase of +0.8% in annual spending signalling that consumers may at last be feeling more confident.
“Retailers on the high street benefitted from a +1.0% annual increase in spending in August, the second strongest increase in 2013 so far, while online retailers also experienced positive annual spending (+1.1%). Consumers’ willingness to spend more in August was evident in the upward trends witnessed in clothing and footwear and miscellaneous goods and services (including hairdressers, beauticians, jewellery and financial services) which both registered positive growth.”
Paul Smith, Senior Economist at Markit said:
“August proved to be a good month for UK household spending, with clothing retailers and restaurants amongst the principal beneficiaries.
“Rising 1.6% on the month, growth has now been registered six times so far this calendar year, indicating that July’s fall was a mere blip; indeed 2013 is rapidly turning out to be a much better year than many probably dared to expect.
“Higher spending volumes are intrinsically linked to the recent strengthening in the UK economic environment. Workplace activity is rising and job security is steadily improving, providing the basis for a strong upturn in consumer confidence and spending recovery.
“Although year-on-year growth in household expenditure remains relatively modest, and the on-going squeeze in real wages provides fragility to the outlook, August’s Visa Europe: UK Expenditure Index adds further to the feel-good factor that seems to be currently engulfing the UK economy.”
