UK spending growth slows as Christmas looms
Consumer spending is returning to normal levels, levelling off as people get used to post-COVID freedoms.
According to data from Nationwide’s latest quarterly spending report, the pace at which spending continued to rise in the third quarter slowed considerably compared with Q2, up by 3% versus 14% as the nation settles into a more regular rhythm.
The Nationwide Spending Report – an analysis of more than 620 million transactions – shows about £23bn was spent by the Society’s members between July and September.
Transactions rose by 10% in the third quarter of the year, although this represented just half of the growth recorded last quarter (20%).
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In terms of spending between July and September, the data points to a 4% jump in essential spending costs and a 12% rise in discretionary spending compared to the second quarter.
New consumer research from Nationwide highlights how increases in household bills could be forcing people to review their spending at a time when the economy has not long fully reopened.
Soaring energy bills, a cut to household benefits in October and consumer price inflation above the Bank of England's target have been widely blamed for a potentially crippling cost of living crisis in the UK.
The building society found that around three quarters (74%) of people are worrying about the rising cost of living and one in four (25%) are uncomfortable about the state of their finances.
There was a 4% hike in the amount spent on utilities as the summer drew to a close. However, it is expected this will rise significantly over the coming period, in line with recently announced energy cost increases, Nationwide said.
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The poll also shows that 18% have turned to credit to get by more in the last few months compared with what they had done previously, while more than a third (36%) say they will need to dip into their savings.
The research comes following data published on Monday by retail monitor Springboard that footfall across the UK had risen by 11.1% in the last week of October, compared with the week before — the largest increase in activity since the week before the late May bank holiday.
Shopping centres saw the greatest increase with a jump of 15.2% and high streets were also notably busier with a rise of 12.1%, according to the latest data from retail experts Springboard.
Retail parks also saw an increase, with footfall up 4.7%.
Over the five days from Monday to Friday the increase was even greater, at 5.5%, in line with the October half-term school holiday.
Springboard's "Central London Back to Office Footfall Benchmark," which tracks footfall in key Central London locations where offices, rather than stores, are located, also showed a 13.5% increase, pointing to the continuing flow of workers back to offices after the lifting of coronavirus restrictions.
Indeed, Nationwide also found that with more people starting to go back to the office more regularly, travel-related transactions grew 30% to more than 30 million between Q2 and Q3, with the total amount spent growing 45% to nearly £280m. This is also likely attributed in part to more people enjoying staycations and using public transport to get to their locations.
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