UK consumers enjoy credit card splurge
Spending on credit and debit cards rose at a near double-digit rate during the past year, challenging suggestions that consumers are tightening their belts.
People spent 9.2% more on their cards during August than they did in the same month of the previous year, according to Barclaycard.
The group said autumn sales, discounts in shops, and back-to-school spending had helped keep the retail sector buoyant during the month, while the rising cost of food and cotton may also be starting to filter through into prices, further boosting spending levels.
It said August was the fourth month in a row during which the annual rate of growth had been more than 9%, challenging suggestions that consumers were being more cautious in the face of looming government cuts.
But spending during August itself dipped slightly compared with July, falling by 1.9%, which the group partly attributed to the fact that many shops started their summer sales in July.
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."