Consumer spending grew as fuel prices increased | moneyfacts.co.uk

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Michael Brown

Content Writer
Published: 12/07/2022

Consumer card spending grew once again in June, driven by the increased price of fuel, according to the latest Barclaycard spending report.

“The continued rise in fuel, food and energy prices means consumers are having to budget and seek out value where they can for both essential and non-essential purchases,” said José Carvalho, Head of Consumer Products at Barclaycard.

The study, which records almost half of total consumer card spending in the UK for June, found that there was a 4.4% increase in spending on essential items from the year to June. These include items like food, drink, and fuel.

Specifically, spending on fuel increased by almost a quarter last month.

This is largely corroborated by the RAC Fuel Watch, which found that the average cost per litre of fuel increased by almost 17p in June. It means that the cost of filling up an average sized 55-litre family car increased by over £9.

“Not a day in June went by when petrol prices didn’t go up, even though the price retailers pay to buy in fuel went down. There’s no doubt that drivers are getting an incredibly raw deal at the pumps at a time when the cost of living crisis is being felt ever more acutely,” said Simon Williams, Spokesperson at RAC.

Discretionary spending rises lethargically

Spending on non-essential items, such as restaurants, travel, and entertainment to name a few, increased by 7% when compared to the same time last year.

In contrast, Barclaycard said this was a “noticeably lower level of growth” when compared to previous months. In the year to May non-essential spending increased almost 12% and in the year to April it increased just over 21%.

Still, the rise in discretionary spending this month was in part due to a spending boost in travel and entertainment.

Spending on hospitality also increased, as consumers sought to take advantage of the summer weather by eating and drinking out with friends.  

“The hospitality and entertainment sectors have had a tough few years, with lockdowns and now rising inflation, so it’s heartening to see that, for the moment at least, people are going out to eat and enjoying cinema shows again,” said Jasmine Birtles, Financial Expert at Barclaycard.

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