UK consumer spending growth hits eight-month high

British consumer spending grew at its fastest rate in eight months in January, according to Visa’s consumer spending index, helped by a surge in clothing and footwear sales.

Visa’s consumer spending index revealed that consumer spending increased by 2.7 percent on an annual basis in January, the highest growth rate since May 2014, and up from 2.2 percent in December. This was helped by a 5 percent increase in clothing and footwear sales, following a dip in December, thanks to the cold weather and January sales.

Kevin Jenkins, UK and Ireland managing director Visa Europe said: “It’s a feel good start to the year for retailers and consumers, despite the global economic jitters. Spending rose most prominently on the high street, though it still looks to be prudent rather than excessive at this stage.

“Leisure and hospitality continue to outperform as sectors, but clothing and footwear retailers were the real winners after a disappointing dip in December. The arrival of the winter weather, combined with January sales, saw spend on warmer wears surge 5%. While e-commerce spend continues to grow strongly as ever, this is a clear statement by the high street that it can still attract customers.”

Visa consumer spending index shows clothing sales increase

Six of the eight broad spending categories registered expenditure growth in January, led by the Hotels and Restaurants and Recreation and Culture sectors. The next best performing sector was Clothing and Footwear.

Annabel Fiddes, an economist at Markit, the data company that compiled the figures added: “It was encouraging to see that expenditure growth was supported by higher spending in the majority of sectors, led once again by hotels and restaurants and recreation and culture.

“Overall, while a positive economic backdrop in the UK remains supportive of higher expenditure, an increasingly murky global economic picture may weigh on consumer confidence and spending in the coming months.”

Commenting on the January figures, independent bridal retailer Blush Boutique in Oldham said: “We’ve had a remarkable January. As expected, many of the people that received proposals over the Christmas period have been through our doors to place their orders.

“The business has also benefitted from a growing social media and online presence. Customers also appear to be making the most of the information at their disposable, and are looking for the best offer without sacrificing quality.”

Image: Visa