Summery weather helps boost UK consumer spending, surveys show
2024.09.02 20:07
(Reuters) – British consumer spending increased modestly in annual terms during August, fuelled by spending on food and drink during summery weather, according to surveys on Tuesday that added to signs of steady economic growth in the second half of 2024.
Barclays said consumer spending on its credit and debit cards rose by 1.0% year-on-year in August, bucking two months of decline.
A separate survey from the British Retail Consortium also showed spending in shops increased by 1.0% in annual terms in August, the strongest uptick since March.
Both surveys showed a surge in grocery spending, attributed to people enjoying barbecues and picnics during summery weather.
The reports chimed with various consumer and business surveys that suggest Britain’s economy will expand at a solid pace through the second half of the year, albeit slowing from the rates seen earlier in the year as the economy rebounded from a shallow recession.
Jack Meaning, chief UK economist at Barclays, said its survey supported its view that consumers would increasingly support the economy, which had been reliant on government spending for growth.
“Growing real incomes and strengthening consumer confidence should combine with falling interest rates to increasingly allow consumers to put their spending power to work,” Meaning added.
Britain’s economy emerged in early 2024 from a brief and shallow recession in the second half of last year and is expected to grow by 1.25% over 2024 as a whole, the BoE said last month, potentially outpacing France, Germany and Italy.
New Prime Minister Keir Starmer has said he will aim to double that pace of economic growth.
