SHOPPERS are splashing out with their credit and debit cards at a near-double digit rate, figures showed yesterday.
Card users put 9.2 per cent more on plastic last month than they did in the same month of the previous year.
August was the fourth month in a row during which the annual rate of growth was more than nine per cent compared with the previous year – suggesting that cash-strapped consumers are not reducing their spending despite a looming programme of government cuts.
The index, based on transactions processed by Barclaycard Global Payment Acceptance, showed that sales, discounts and back-to-school spending had helped keep the retail sector buoyant during the month.
The rising cost of food and cotton may also be starting to filter through into prices, further boosting spending levels, according to the research. Earlier this week Next said its clothes prices could rise by up to five per cent.
But spending during August itself dipped slightly compared with July, falling by 1.9 per cent.
The group partly attributed this to the fact that many shops started their summer sales in that month.
Stuart Neal, head of Barclaycard UK Payment Acceptance, said: “With leading retailers warning that the government austerity drive will keep the economy in the doldrums and hit consumer confidence hard, it is good to see a fourth month of increased spending. While there is some cause for viewing the near future with a certain amount of trepidation, recent indicators are good. Confidence remains relatively high, but it will be important to see how spending fares when public spending cutbacks begin to hit people’s pockets, and not just the headlines.”
City A.M. Reporter