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Consumer spending growth rose 2.8 per cent year-on-year in November, maintaining the muted levels seen throughout the second half of 2017. With inflation running at 3 per cent, it marked the second consecutive month where household expenditure contracted in real terms.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that consumers continued to manage their spending cautiously following months of rising prices and stagnant wage growth.
Tough times endured on the high street with in-store spending at -0.1 per cent, the seventh straight month in negative territory. Although online spending posted a double-digit increase of 10.8 per cent, this is down from an August high of 15.7 per cent, with November marking the third successive month in which growth in online spend has slowed.
Essential spending growth of 3 per cent was broadly in line with October’s figure (2.9 per cent). Growth in non-essentials, however, rebounded as consumers tweaked their allocation of spending on the ‘nice-to-haves’, rising 2.8 per cent from 2.2 per cent.
Airlines – which had posted a record-high growth rate of 10.9 per cent in October – fell out of favour, contracting 2.8 per cent year-on-year. Instead Brits opted to spend on leisure time with friends and family as the nights drew in, helping pubs (11 per cent) and restaurants (12.1 per cent) return to levels seen earlier this year, after a brief slowdown in the three months to October. This pushed up entertainment spending to 9.5 per cent, its best performance since July.
Electronic stores meanwhile finally stemmed 12 straight months of decline to enter positive territory, up 0.9 per cent year-on-year – possibly the result of shoppers upgrading to the newly released iPhone 8, iPhone 8 Plus and iPhone X. Men’s clothing also saw its best performance since July 2016 (8.1 per cent), although it wasn’t enough to revive clothing spend overall (-0.9 per cent).