UK consumers have a spring in their step
As spring approaches indicators suggest that consumers are gaining in confidence, with household spending steadily increasing.
The latest UK Expenditure Index, compiled by Visa Europe, shows a 1.1% upsurge in spending figures for March compared to the previous year.
The boost is being driven by the hospitality sector, with Hotels, Restaurants and Bars reporting a 7.1% rise on the year.
The Recreation and Culture industry also performed well seeing a 2% increase in spending over the same period.
Of the eight categories that were included, five showed improvement, however Clothing and Footwear suffered a fall on the year of -4.8%, marking a fourth month of contraction for the sector.
Economist at Markit, Annabel Fiddes, said the findings showed “a further steady increase in consumer spending, with growth recorded across all three expenditure measures in March.
“Consumers spent more on going out to Hotels, Restaurants & Bars, while Recreation & Culture categories also saw solid growth. However, Clothing & Footwear retailers recorded reduced spending for the sixth time in the past seven months.
“Strong growth in total consumer spending adds to evidence that the UK economy is on track for an expansion of GDP of around 0.7% in Q1 according to our estimates.
“Furthermore, a tightening labour market and weaker inflationary pressures have contributed to a renewed increase in real wages, suggesting that expenditure trends will remain positive as we head into Q2.”
UK & Ireland Managing Director Visa Europe, Kevin Jenkins, attributed the figures to a “dry March, coupled with low inflation and real wage increases has continued that trend. People across Britain are increasingly dining out and going out, though spending remains prudent rather than excessive.
“Elsewhere in the economy, clothing retailers remain under pressure after a fourth straight month of spending decline. Summer lines, the May bank holidays and good weather ahead will be looked on with hope as well as expectation.”
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