Consumer spending returned to an eight month high in January as the freezing temperatures and discounts drove more shoppers to the high street to stock up on winter clothing.
Spending rose by 2.7 per cent year-on-year in January from a 2.2 per cent rise in December and was the highest growth rate since May 2014, figures from Visa Europe today reveal.
The card company, whose debit and credit cards account for £1 in £3 of all UK spending, said clothing and footwear made the strongest recovery, recorded a five per cent rise following a 1.2 per cent decline in December.
BDO’s latest high street tracker released on Friday also supported this trend, with like-for-like sales up by 1.4 per cent year-on-year in January led by fashion retailers.
However, leisure showed the strongest growth, with spending on hotels, restaurants and bars rising by 9.7 per cent in January. Recreation and cultural activities also benefitted from a sharp rise in spending – up 7.8 per cent year-on-year.
Online spending slowed to 4.6 per cent from December’s six-month peak of 7.3 per cent, while spending in stores was rose by 2.5 per cent on the year.
Kevin Jenkins, Visa Europe’s UK & Ireland managing director, said: “It’s a feel good start to the year for retailers and consumers, despite the global economic jitters. Spending rose most prominently on the high street, though it still looks to be prudent rather than excessive at this stage.”