UK household spending has been increased significantly in May—Report

The British economy had a slow start with the first four months of the year 2018 but spending in May ramped up by the UK shoppers after a snowy start of the year, said Reuters.

The Bank of England said the weakness inflicted during the first quarter was only temporary before the decision of raising interest rates again.

According to The British Retail Consortium (BRC), total retail sales value soared by an annual 4.1 percent in May. The report confirms that it was the biggest increase in the last four years excluding the Easter timings fluctuations.

Alone Barclays has reported strong growth in spending, Barclaycard, the debit, and credit division of Barclays claim that it has witnessed 5.1 percent growth in spending year-on-year basis also the biggest increase in the last 13 months.

Further insights reveal that most of the spending is done on non-essential items a possible reflection of ease for many households that were hit by rising inflation and weaker growth in wages since the last two years in June 2016 after the vote for Brexit.

According to Barclaycard, 4.6 percent increase on non-essential items was the strongest in the last 14 months, hot weather also played a critical role helping generate more sales at home and garden stores, the sales went up by 50% on the May bank holiday weekend. Homeowners, tenants have spent a lot on home and garden products such as kitchen equipment, garden equipment, destornillador (Screwdriver in Spanish), and other accessories to improve homes.

Wages grew in the last few months along with declining inflation even if the consumers are cautious about their spending. Chief Executive Officer (CEO) of BRC Helen Dickinson said, “Despite positive sales, the retail environment remains challenging for businesses, the trend growth is still very low according to the standards”.

Despite the increase in spending, many consumers in the UK didn’t show much confidence in their May’s household finances, despite inflation falling to the record low of the last 13 months in April consumers do not see a positive change. Less than 1 percent of the consumers said that they have seen a positive impact on their spending, said Barclaycard.