Solid growth in consumer spending in February, boosted by rising real incomes and low inflation
A summary on Visa’s Expenditure Index for February 2015 which launches soon. The report shows a further increase in year-on-year spending in February. An embargoed copy of the report is attached here and headline findings are:
– Consumer spending rises 1.2% on an annual basis in February as household incomes returned to pre-recession levels
– Strongest spending increases in hotels, restaurants / bars; food, beverages / tobacco; and household goods
– High street spending remains a key driver of overall growth
Commented on January data, Kevin Jenkins, managing director UK & Ireland at Visa Europe said: “Household spending may not have been quite as strong as January, but February was still another good month for the consumer economy. With household incomes returning to pre-recession levels and low prices on food and fuel, consumer confidence looks in decent shape.
“British consumers look to be spending more on the things they enjoy. Dining out was clearly popular again in February as hotels, restaurants and bars saw a bumper month, while spend on recreation and culture bounced back for the first time since August 2014.
“On the flip side, spending on clothing fell for a third month in a row in February.”
Visa UK Expenditure Index uses card transaction data to provide a robust indicator of total consumer expenditure across all payment methods. It is based on spending on all Visa debit, credit and prepaid cards which are used to make an average of over 1.9 billion transactions every quarter and account for £1 in £3 of all UK spending. Working with Markit, these card spending data figures are adjusted for a variety of factors such as card issuance, changing consumer preferences to pay by card rather than cash and inflation. These adjustments mean that these data are distinct from Visa Europe’s business performance and the Index reflects overall consumer spending, not just that on cards.
