According to surveys, British consumer spending saw a modest increase in August, driven by purchases of food and drink during sunny weather. Barclays reported a 1.0% year-on-year rise in consumer spending on its credit and debit cards, breaking a two-month decline trend. The British Retail Consortium also noted a 1.0% increase in spending in shops, marking the strongest growth since March.
The surge in grocery spending was attributed to people enjoying barbecues and picnics in the summery weather. These reports align with other consumer and business surveys indicating steady economic growth in the second half of 2024. Jack Meaning, chief UK economist at Barclays, highlighted the potential for consumer spending to drive economic growth, as real incomes rise and consumer confidence strengthens.
After a brief recession in late 2023, Britain's economy is expected to grow by 1.25% in 2024, surpassing France, Germany, and Italy. Prime Minister Keir Starmer aims to double this growth rate.
Analysis:
The increase in consumer spending in August indicates a positive trend for the UK economy, with potential for sustained growth in the second half of 2024. As consumer confidence rises and real incomes grow, individuals are likely to contribute more to economic activity through their spending habits. This could lead to a boost in overall economic output and potentially outperform other major European economies. Prime Minister Starmer's ambitious growth targets reflect a commitment to further bolstering the economy.