Consumers splash the cash in October, as spending growth hits six-month high

Hayley Kirton
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Spending has surged for hotels, restaurants and bars (Source: Getty)

Brits have been on a spending spree during October, with a surge in money spent heading to hotels, restaurants and bars, according to figures out today.

Visa's UK Consumer Spending Index showed that year-on-year growth for consumer spending had risen to 2.5 per cent for October, the sharpest rise in six months and up from 2.3 per cent in September.

Spending in hotels, restaurants and bars rose by nine per cent, while cash forked out for recreational and cultural activities also rose by 7.4 per cent. However, the quickest growth in spending was for clothing and footwear, which increased by 4.7 per cent.

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Expenditure in brick-and-mortar establishments expanded for the first time in three months, growing by 1.8 per cent, while online spending was up by 4.3 per cent.

Kevin Jenkins, UK & Ireland managing director at Visa noted that consumers seemed undeterred by "talk of potential price rises" and praised the rise of the "experience economy" for firing up spending during the last month.

"As we get closer to the all-important Christmas trading season, it will be interesting to see whether the strong momentum in October continues into Black Friday and beyond," Jenkins added.

Read more: Singles Day: What can UK firms learn from China's version of Black Friday?

Figures released by Visa earlier this year pointed to sluggish spending growth over the summer, as shoppers struggled to come to terms with what the Brexit vote likely meant for their back pocket.

"While the [most recent] data paint a very encouraging picture of household spending, clouds continue to gather on the horizon as uncertainties around Brexit continue to dampen confidence and growth forecasts for the year ahead," commented Annabel Fiddes, economist at IHS Markit. "Furthermore, rising expectations of greater inflationary pressures could lead to a tighter squeeze on households' purchasing power in the coming months."

Meanwhile, the figures also showed a slip in spending growth month-on-month, with October growth down to 0.8 per cent compared with September's 1.9 per cent.

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