Card Spending Grows 2% in September, as Consumer Confidence Improves
Card spending rose 2.0 per cent year-on-year in September, just below August’s 2.1 per cent growth, and remaining below the latest CPIH inflation rate of 3.3 per centThe Barclays Consumer Spend report reveals.
Essential spending increased 2.5 per cent, outpacing the 1.8 per cent increase in non-essential spending, driven largely by a 17.3 per cent spike for fuel. Meanwhile continued demand for meals and drinks out supported hospitality & leisure’s 2.7 per cent boost
Warm September weather boosts hospitality & leisure
Non-essential spending increased 1.8 per cent in September, with hospitality & leisure continuing its strong streak, up 2.7 per cent, following August’s 3.3 per cent growth. Within entertainment, up 1.5 per cent, cinemas, bowling alleys, and golf clubs all performed particularly well.
After the summer weather lasted throughout most of September, the overall eating & drinking category grew 2.4 per cent. Restaurants, cafes & bakeries were up 2.1 per cent, while bars, pubs & clubs enjoyed a 3.8 per cent boost, marking their fourth consecutive month of growth.
| Growth in Hospitality & Leisure Spending | ||||
| June | July | August | September | |
| Hospitality & Leisure | 1.0% | 2.2% | 3.3% | 2.7% |
| Entertainment | 0.2% | 2.0% | 5.9% | 1.5% |
| Bars, Pubs & Clubs | 0.7% | 7.4% | 2.7% | 3.8% |
| Restaurants, Cafes & Bakeries | 0.0% | 2.1% | 1.5% | 2.1% |
Confidence in household finances climbed to a seven month-high at 67 per cent, while confidence in job security (45 per cent), and consumers’ ability to live within their means (73 per cent) also improved (up from 44 per cent and 71 per cent respectively). Confidence in the UK economy stabilised at 26 per cent – on par with August’s figure.
Despite improving confidence in their own finances, consumers remain cautious ahead of the Autumn Budget. Nearly seven in 10 consumers (68 per cent) are concerned about its potential impact on their household finances, while 61 per cent are concerned about possible tax changes. Four in 10 (38 per cent) feel less sure than in previous years about the implications of the announcements that may be made.
This uncertainty is influencing household decision-making; a quarter (25 per cent) are reportedly building up a precautionary savings buffer, and 30 per cent say they’re reducing non-essential spending, while 27 per cent report delaying both major purchases and important financial decisions pre-Budget. Despite this, 61 per cent feel confident in their ability to make good financial decisions in uncertain times and 53 per cent feel in control of their finances, even in times of volatility.
Rohan Kumar, Head of Spend Insights at Barclays, said: “Spending maintained momentum in September, with growth across both essential and non-essential categories as confidence in household finances reached a seven-month high. Warmer weather supported another strong month for hospitality and leisure, while the rise in digital subscriptions suggests consumers are balancing socialising with autumn nights at home, even as pre-Budget uncertainty keeps value and careful decision-making front of mind.”
Jack Meaning, Chief UK Economist at Barclays, who said: “The caution felt by consumers ahead of the Budget mirrors what we have also seen in our surveys of UK businesses. This should reinforce the importance of the Chancellor delivering clarity and confidence from the dispatch box on 28 October. As rising inflation and tight financial conditions begin to squeeze spending power, we will be watching closely to see whether recent UK consumer resilience can continue into the winter.”