Spending rises as households forced to shell out more for weekly shop

Helen Cahill
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Spending in cafes and restaurants is still on the up (Source: Monzo)

Spending on Barclaycards climbed last month as shoppers were forced to shell out more for their weekly shop.

Consumer spending grew by 3.5 per cent in July, according to figures from Barclaycard.

This was partly due to rises in shop prices; figures from the British Retail Consortium showed a 1.2 per cent rise in food prices last month.

Despite rising prices on essentials (spending on fuel rose 2.5 per cent), consumers still prioritised spending on days out. Spending on entertainment climbed 12.5 per cent year-on-year, and spending in restaurants and pubs grew 13.3 per cent and 11.8 per cent respectively.

Shoppers were less inclined to spend their squeezed budgets on new clothes. Spending on clothing fell 0.3 per cent, with spending on women's fashion falling by as much as 4.9 per cent as compared to July 2016.

Read more: Retailers and film industry deliver 0.3 per cent British GDP expansion

Paul Lockstone, managing director at Barclaycard, said: "Although consumer spending growth rebounded from May and June's lacklustre performance, lack month's figures should be treated with caution. While supermarkets posted a strong performance, some of that growth will be due to higher prices.

"As a result, consumers would have had to budget more carefully to spend on their favourite 'nice-to-haves' whether that was a night out at the cinema or a meal with friends and family."

Barclaycard's figures are at odds with the spending report from Visa published on Monday which found spending in July fell 0.8 per cent. Visa said the figures represented the third consecutive month of falling spending. Its figures are adjusted for tax and for the increasing number of people that choose to spend using cards.

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