Consumers continue to spend on pubs and restaurants despite continued signs that overall consumer confidence is faltering.
New figures from Barclaycard showed that spending in pubs and restaurants grew by 10.2% and 11.8% respectively in October, compared to the same month a year before.
This was despite the fact that overall consumer spending growth fell to 2.4% in October 2017. Growth in spending on essentials slowed year-on-year to 2.9% but outstripped that of non-essentials (2.2%), as shoppers cut back on “nice-to-haves”.
Consumers reined in their spending on entertainment (7.9%), which dropped below the 10.3% average recorded for 2017 to date. October represented the third consecutive month of weakened growth in entertainment, from a summertime high of 12.5% in July.
Meanwhile, Brits have a gloomy outlook on the UK economy, according to Barclaycard, with just 31% expressing confidence. That’s the second-lowest proportion of the last 12 months and down 6% on September.
In October, 31% said they would need to change their everyday spending patterns to cope with an increase in the base rate – and 27% indicated that a hike would put a dampener on their Christmas spending plans.
Paul Lockstone, managing director at Barclaycard, said: “Household expenditure remained muted in October and, when taking into account inflation, equated to a decline in real terms. This is a reflection of consumers paring back to cope with their reduced spending power, a tactic which, for the moment, has given them confidence in their ability to manage their household finances.
“That said, last month many indicated that an interest rate rise would affect their everyday spending. In light of the Bank of England’s announcement last week, it’ll be interesting to see how shoppers, who have so far demonstrated their resilience, continue to juggle the many demands on their budget. As we enter the run-up to Christmas, Black Friday will be the first major opportunity to see whether consumers really do tighten their belts.”
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