Consumer spending grew by 3.5 per cent year-on-year in July, the highest figure since April, as the cost of everyday groceries continued to push up spending in supermarkets. Shoppers reported another month of ‘feeling the squeeze’ of higher inflation and subdued wage growth, dampening confidence in the wider economy.
However data from Barclaycard revealed that consumers are carefully budgeted for their priorities, spending on leisure time with friends and family. Restaurants (13.3%) and pubs (11.8%) remained robust as Brits enjoyed the sunny summer weather last month. Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, also shows, however, that consumers received some respite from a continued drop in petrol prices, which have fallen from an average of 120p per litre at the start of the year to 113p last month. As a result, expenditure on the forecourt increased just 2.5 per cent in July, the lowest figure since August 2016.
Expenditure on cinemas and tickets grew 24.3 per cent as Brits flocked to see new blockbusters such as Dunkirk, Baby Driver and Despicable Me 3, and snapped up tickets for the 2018 tours of Ed Sheeran and The Killers. In addition, restaurants (13.3 per cent) and pubs (11.8 per cent) remained robust as Brits enjoyed the sunny summer weather.
As consumers increasingly felt the pressure from months of higher grocery prices and re-allocated their budget to make ends meet, consumer sentiment also weakened. The proportion of those confident in the UK economy fell to 28 per cent in July, the lowest figure recorded since Barclaycard began its research in 2014, and a continuation of the downward trajectory that started in March.