Visa’s UK consumer spending index signals robust growth in household expenditure at the start of the fourth quarter. On an annual basis, spending rose +2.5 per cent, up from +2.3 per cent in September and the strongest rate of increase in six months.
Compiled by Markit, the index is distinct from Visa’s business performance and reflects overall consumer spending, not just that on cards.
E-commerce spending increases solidly (+4.3 per cent), while face-to-face expenditure expands for the first time in three months (+1.8 per cent)
Large jumps are seen with hotels, restaurants & bars (+9.0 per cent) and recreation & culture (+7.4 per cent), while spending on clothing and footwear rises at its quickest rate since September 2015 (+4.7 per cent)
Kevin Jenkins, UK & Ireland managing director at Visa, thinks that talk of potential price rises does not appear to have dented consumers’ confidence.
Strong growth running up to Christmas
He says, ‘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.’
Josh Beer, The Illustrious Pub Company in Cambridgeshire, says, ‘October tends to be a good month for us as people settle back into their routine following holidays and new winter menus are launched.
‘We look to Christmas parties and gatherings as key revenue drivers for the rest of the year. Although these haven’t been totally booked up yet, it feels as though people are increasingly leaving making bookings late. There does seem to be concerns about inflation and petrol price rises. Bearing this in mind we’re taking a cautious view as we look to the future.’
Imogen Hawthorne, Paisley Immy Cakes in Birmingham adds, ‘While our sales in October were quite standard for this time of the year, there were two positive factors that we noticed this month.
‘First, we saw an increase in orders during half term, mainly for children’s parties. Second, our customers were in the mood to spend as more were opting for our top of the range cakes for their special occasions. Looking forward, we’re slightly worried about rising inflation and how it will impact our costs and sales. ‘
Further reading on spending
