Consumer confidence 'holding steady' in wake of Brexit vote, says Barclaycard
Consumers' spending increased in the week after the EU referendum - but there were signs of shoppers adopting a more cautious mind-set - according to data from Barclaycard.
Between June 24 and June 30, there was a 2.14% increase in consumer spending compared with the previous week, suggesting that many consumers avoided a knee-jerk reaction to the Brexit vote, its report said.
However, those behind the report pointed out that spending often tends to go up towards the end of any month, as it coincides with payday for many people.
There was also some mixed underlying news, as people appeared to have reined in their spending in pubs and restaurants towards the end of last month.
Spending in pubs and restaurants, which traditionally see double-digit growth at the end of the month when many people get their pay packets, fell back by 0.44% and 0.46% respectively in the seven days starting on June 24.
The report said the figures suggest "consumers may have adopted a cautious mind-set around discretionary spending in the days after the referendum result".
Barclaycard said that in general, consumer confidence appears to be holding steady. A survey of more than 1,700 people conducted on July 5 and July 6 on behalf of Barclaycard found 52% expect to see no impact on their household finances as a result of the vote.
When a similar survey was carried out between June 24 and June 28, only 39% expected to see no change, suggesting confidence has crept up slightly.
The report is based on transactions on Barclaycard credit cards as well as spending on Barclays debit cards. Barclaycard processes nearly half of all card transactions in the UK.
Compared with a year earlier, spending across the second quarter of 2016 was up by 3.1%, the report said.
While short-term confidence appears to have improved, concerns remain about the potential long-term impacts of the country's decision, the report said.
Four in 10 (43%) consumers expect their household finances to deteriorate as a result of the UK's decision to leave the EU. Of these, 81% believe the cause will be an increase in the cost of everyday items such as groceries and petrol, while three-quarters (76%) think the UK will return to a recession.
Paul Lockstone, managing director at Barclaycard, said: "While it's too soon to draw long-term conclusions on how spending and sentiment have been affected by the outcome of the referendum, the early indication is that the majority of consumers avoided a knee-jerk reaction.
"Spending grew in the week immediately following the vote, suggesting that shoppers were pleased that the uncertainty that has hung over the economy had at least in part been lifted."
A separate report from Visa this week found that in the run-up to the referendum, c onsumers' spending grew at the weakest rate seen in over two years.