UK consumer spending rose 5% year-on-year in July, boosted by the largest increase in women’s clothing sales since January 2016 amid unusually warm temperatures, new figures show.
The July rise marks the third consecutive month of growth above 5% and the strongest three-month period since it began measuring this data in 2014, according to Barclaycard, part of Barclays Bank, which processes nearly half of the nation’s credit and debit card transactions..
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Consumers have been keen to take advantage of the warmer weather, with almost a quarter (23%) saying the hot temperatures this summer have prompted them to spend more money than usual on experiences and outdoor activities.
Meanwhile, the long spell of warm weather has also been good news for women’s clothing, with spend increasing 4.5% – the strongest rise since January 2016 – as shoppers updated their summer wardrobes.
However, despite a willingness to spend on summer treats during the good weather, shoppers remain cautious about the broader economic picture, with confidence in household finances dropping six percentage points from June to 59% last month.
Rising interest rates are another area of concern for some, with one in three (34%) saying they are worried that the Bank of England raising interest rates on 2 August means they will have less spending money each month.
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By GlobalDataEsme Harwood, director at Barclaycard, says the prolonged warm weather has created a short-term boost in spending, meaning spending levels have remained higher than the firm would normally expect with Brits keen to make the most of the heatwave.
“It will be interesting to see if this strong level of growth continues as we move into the final stretch of summer,” she adds. “It’s clear that some consumers remain cautious about what’s to come with interest rates rising and overall confidence in household finances down slightly from June.”
