Higher earnings, hot weather and the extension of Article 50, helped consumer spending to improve in the three months ended to April 2019.
The latest survey exhibits that, consumers in the UK spent more on bars and restaurants during the Easter vacations last month and there were signals that people are now less worried about the divorce from the EU bloc.
However, as per the British Retail Consortium (BRC), high-streets in the UK failed to meet the sales expectation in April despite registering a 4.1 per cent y-o-y surge (total spending growth) which in part reflected the timing of the Easter vacations.
The strong labour market in the UK also provided support to the consumer spending during the three months ended to April. As per the recent data available on the ONS website for the three months to February, the strength of full-time workers surged by 473,000 as compared with the corresponding period of the previous year, while real annual earnings rose by 1.5 per cent, the peak level post first quarter of 2016.
Barclaycard reported that spending at bars and eatery surged by 13 per cent and 10 per cent respectively on a yearly basis. However, the overall surge in consumer spending got benefited by 2.5 per cent increase in the last month.
Meanwhile, spending on flight bookings declined by 4.8 per cent and registered the weakest performance for the sector since Barclaycard started tracking this category.
Hot weather, mainly over the Easter holidays and the extension of the EU divorce deadline until the end of October, have boosted the confidence of British consumers and around 33 per cent consumers shown confidence in the British economy against the 26 per cent in March.
However, the majority of consumers remained cautious as they assume no change in their spending plans for May and one out of ten were likely to spend on big-ticket size items on account of uncertainties around the EU divorce.
As per some of the analyst data, the sales at the retail stores (excluding opening and stores closures) surged by 0.7 per cent on a like-for-like basis as compared with the corresponding period of the previous year. The rise in the spending was primarily driven by stronger food products, while non-food items reported contraction during the three months ended to April’19.
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