People splashed more on theatre tickets and other cultural and recreational activities than on clothes and shoes. Photograph: Anthony Devlin/PA
Household spending bounced back last month, with people splashing out on theatre trips, restaurants and holidays, according to new figures.
UK consumer spending was up 2.4% year-on-year in September, having been broadly flat in August, said payments company Visa. That was the fastest growth since April.
The trend continued in September for people to prioritise spending on experiences over buying things. The fastest spending growth was in the recreation and culture industry followed by hotels, restaurants and bars. Contrasting with that, spending on clothes and shoes was down on a year ago.
Taking the latest three months together, Visa said momentum remained subdued as households continued to digest the result of June’s referendum on EU membership.
“It is too early to say whether the growth seen in September will continue, and positive signs return more permanently following the soft patch that began in May,” said Kevin Jenkins, UK & Ireland managing director at Visa.
The figures, compiled for Visa by data company IHS Markit, showed e-commerce spending increased at the quickest rate since April, up 6% on the year, while face-to-face spending was broadly unchanged from one year earlier, edging up 0.1%.
September’s robust spending figures chime with signs consumer confidence also recovered last month, helped by low unemployment, record low interest rates and relatively low inflation. A key gauge of sentiment compiled by market researchers GfK was back as its pre-referendum level in September.
But economists warn rising prices could soon sour shoppers’ moods. The pound’s sharp fall against other currencies since the Brexit vote has raised the cost of imports to the UK such as foods and manufacturers’ raw materials. Firms say they will have to pass at least some of those higher costs to customers.
There are signs of inflationary pressures in a report from Lloyds Bank on Monday. Its survey of businesses in England and Wales found there was another steep rise in firms’ input costs in September, which translated into higher prices charged for goods and services.
“The weaker pound remains a focal point in the survey data. Improved competitiveness has no doubt given added impetus to the post-EU referendum rebound, but increasingly businesses are feeling the impact of higher import costs,” said Tim Hinton, a specialist in banking for small and medium-sized companies at Lloyds.