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Double-digit spending growth in August for hotels, pubs and restaurants

06 September 2016 by
Double-digit spending growth in August for hotels, pubs and restaurants

Restaurants, pubs and hotels all saw double-digit spending growth in August, as the warmer weather pushed overall consumer spending to a 13-month high.

Consumer spending as a whole was up 4.2% year-on-year according to the latest data from Barclaycard, up from a 2.6% rise in July.

Hotel spend was up 14.9% year-on-year - its highest year-on-year increase in 24 months - while warmer weather encouraged Brits to spend time out with family and friends, with spending in pubs and restaurants rising by 13.3% and 12.7% respectively

The spending on hotels, which includes hotels overseas, is thought to have risen so strongly in part because consumers remained committed to long-term travel plans and therefore had to swallow the rising cost of overseas accommodation in line with the depreciation of sterling.

Barclaycard said that the data revealed that many continued to take a "business as usual approach to spending" throughout August. In particular, spending on experiences and holidays recorded strong growth.

However, caution still lingers for many consumers despite the August rise in spending. Only 58% of consumers expressed confidence in their household finances, significantly lower than the average of 71% recorded in 2015. In addition, Barclaycard said that long-term forecasts for rising prices and subdued wage growth may be responsible for just four in 10 (38%) consumers saying they are confident in the UK economy.

Paul Lockstone, managing director at Barclaycard, said: "Consumer spending has continued to grow after the EU referendum, with August being a particular stand-out month considering confidence in household finances remains low compared to levels seen last year.

"Spending peaks in travel and hotels indicate that most consumers were firmly committed to their summer plans, and spent on trips and excursions they booked months in advance. Yet confidence continues to be shaky as the wider economic picture remains uncertain, suggesting it's too soon to tell if this lift in spending will last once everyone's holiday tans have faded."

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