UK consumer spending increased again in July, on an annual basis, household expenditure rose +1.9%, up from +1.4% in June, and slightly stronger than the average annual increase seen over the first half of 2015. Spending volumes also rose on a monthly basis in July (+0.1%), following declines in the prior two months. Meanwhile, expenditure declined fractionally on the quarterly measure (-0.1%), after a slight rise in June (+0.9%).
This is according to Visa Europe’s UK Expenditure Index, which 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.
Household spending increased through Online and Face- to-Face channels in July, but fell through Mail/Telephone Order categories.
Online categories saw the most marked rise in spending during July (+6.3% year-on-year), with the rate of growth little-changed from June’s 18-month peak (+6.7%).
Household expenditure also rose in Face-to-Face categories during July (+1.4% on the year), after a marginal fall in June (-0.2%).
Meanwhile, spending declined slightly through Mail/ Telephone Orders categories (-0.1% on an annual basis), following increases in each of the prior seven months.
A further solid increase in consumer spending was likely to have been supported by a variety of positive economic factors. UK unemployment remains near a multi-year low, UK Expenditure Index & GDP while consumer price inflation continues to hover around the zero percent mark, which has helped to push up wages in real terms. Consumers and businesses also continue to
benefit from record-low interest rates.
Overall, improving economic fundamentals are likely to support further increases in expenditure in the coming months, with the Visa data suggesting that the economy has started the third quarter on a solid footing.
For data, background and forecasts on Visa Europe UK Expenditures: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].
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