Holiday season boosts consumer spending
Consumer spending saw strong growth in July, with people splashing out on enjoying themselves in cinemas, theme parks and restaurants as holiday season got under way.
Spending increased by 1.9% annually in July, up from 1.4% in June and stronger than the average growth rate seen over the first half of the year, according to Visa Europe's UK Expenditure Index.
Hotels, bars and restaurants registered the steepest growth in spending, recording an 8.6% annual increase. Spending on recreation and culture, which includes cinemas and theme parks, also saw marked growth of 5.6%.
Spending on miscellaneous goods and services, which includes hairdressing and jewellery, increased by 5.1%.
Compiled by Markit, Visa's index reflects overall consumer spending, not just that taking place on cards.
Kevin Jenkins, UK and Ireland managing director of Visa Europe, said w ith the holiday season in full swing, Britons' spending on leisure activities for the family, dinners and nights out were behind the "strong" expenditure growth.
He said: "Looking forward, it will be interesting to see how consumers react to the possibility of interest rate increases looming on the horizon.
"The overall outlook for consumer spending remains positive rather than excessive, with low inflation and a pick-up in wages continuing to put money into the pocket of consumers."