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Highlights
- UK’s card payments increase by 100% of the pre-pandemic period.
- This is 5% increase from last week when it was 95%.
- The ONS report indicates that the gross domestic product (GDP) increased by 5.5% in Q2 after being revised up from the initial estimation of 4.8%.
The UK shoppers are hitting the shops once again and this was reflected from a recent report by the Office for National Statistics. Britons are venturing out after most restrictions were lifted and spendings have increased compared to last week, thereby helping the economy to recover fast post lockdown.
According to the data by the Office for National Statistics, output-per-hour worked, a measure of productivity in the economy, inched up by 0.1% in the second quarter, leaving it 1.7% above its average level in 2019.
This comes amid reports that inflation could cost the UK families £1,800 by the end of the year. According to the research done by Centre for Economics and Business Research (CEBR), the spike has is largely driven by the fuel and food prices which has been causing headaches to the Boris Johnson government with issues of supply chain and lack of proper wages. The rate of inflation is set to top 4% for the first time in a decade - and is already at a three-year high.
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Increased spending
This could well be a sign of the UK economy recovering faster as spending surged in recent months. The ONS report indicated that the gross domestic product (GDP) increased by 5.5% in the second quarter of the year, after being revised up from the initial estimation of 4.8%.
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With the shops and restaurants reopening has helped the power the GDP upwards with contribution from household spending go up by 4%. However, the gap between current growth levels versus the pre-pandemic is now the same as in Germany, similar to the 3.2% shortfall in France, and slightly better than the 3.8 per cent shortfall seen in Italy.
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Transaction costs
While there are issues surrounding the increased transaction costs, the recent card spending figures have shown that the users are not bogged down by the transaction cost. While majority of them preferred to making transactions in cash, which resulted in 15% during the Covid pandemic period. But with the lockdown restrictions being lifted, shoppers are venturing out to the shops or venturing out to have a meal or use online cards for purchases.
There was a speculation that the card usage could drop due to the increased transaction cost on credit and debit transactions, but the figures clearly indicate that the customers are not worried by it.
Conclusion
Card Spending is also a healthy sign that of the economy recovering in UK. With pressure of inflation, fuel crisis all hanging on the head of the government, this would be a welcome news to the government. These figures could go up as the holiday season arrives later this year. However, the impact or lack of it would be visible later.
