UK consumer spending could be about to hit a four-year high as Brits splash cash in hotels, bars, restaurants over high street shops, according to a new study.
Visa Europe's UK Expenditure Index, which crunches card spending, said household expenditure rose by 1.5 percent in October. This offset September's blip, which saw spending fall 0.5 percent, as warm weather distracted shoppers.
The hotels, restaurants and bars sector led the charge with an annual increase of 9.6 per cent, closely followed by food, beverages and tobacco which was buoyed by 4.4 per cent. However Brits snubbed miscellaneous goods and services – such as hairdressing and jewellery – spending on which fell 11.3 per cent. Retailers also fell out of favour, posting a decline of 2.5 per cent.
“Hoteliers, restaurateurs and leisure providers have all had a big boost as the weather and school half-terms encouraged a wave of eating out, weekends away and leisure activities,” said Kevin Jenkins, managing director UK and Ireland at Visa Europe.
“On the flipside, clothing retailers again found the going tougher than hoped for”, he said.
The figures will add to optimism surrounding the strength of the UK economy, as it faces headwinds from an increasingly troubled Europe.
It grew 0.7 per cent in the third quarter of 2014 according to figures from the Office for National Statistics. Although the figure fell from the previous quarter, it's still one of the fastest-growing economies in Europe.
“With only two months of the year left and Christmas approaching, overall spending looks set to reach levels not seen in the UK since 2010”, Kevin Jenkins, managing director of UK and Ireland at Visa Europe, said in the report. “The recovery remains cautious, but certainly tangible.”