UK consumer spending higher in September

UK consumer spending higher in September

Consumer spending increased by 3 per cent in September compared with August, as people spent more on clothes and in hotels and restaurants.

The figures, from Visa Europe’s UK expenditure index which is compiled by Markit, represent the biggest increase since May 2009.

The increased spending follows improvements in the job market which have boosted disposable incomes.

Although in-store spending increased by 1.6 per cent during the month, online spending fell by 1.5 per cent and there was a 3.7 per cent decline in mail order and telephone shopping.

Spending in September 2012 was 0.2 per cent higher than a year ago, while spending in the three months to September was 1.9 per cent higher than the previous three months.

Chris Williamson, chief economist at Markit, said: “Going forward, it seems likely that consumer spending will help boost the economy to a greater extent than it has done over the past two years, due to recent improvements in disposable incomes, lower inflation and rising employment.

“However, consumer confidence remains historically low as uncertainty about the economy and job security persists, suggesting that the bounce in spending seen in the third quarter could be as good as it gets for the foreseeable future.”

Sales of new cars also increased last month, with vehicle registrations increasing by 8.2 per cent to 359,612 compared with September 2011.

Fleet and business sales accounted for 51% of the market at 182,370 units.

Paul Everitt of trade organisation the Society of Motor Manufacturers and Traders (SMMT) said: “Although the economic outlook remains challenging, we are starting to see a tentative return of consumer confidence as motorists explore new products and the latest fuel-efficient technologies”.

The SMMT expected registrations to reach 1.97 million in 2012 as a whole, but will revise the forecast later this month.

source: www.financemarkets.co.uk