People spent more money and made more transactions last month as they made the most of the warm weather and the start of the summer holidays, according to Nationwide’s report into members’ monthly spending.
Consumers spent more on holidays, leisure activities like watching sporting events, and buying new clothes in July amid a spell of hot weather in the UK.
Meanwhile, eating and drinking spending was up by 8% compared with June as people enjoyed socialising with family and friends in pubs and restaurants, the building society found.
It came after households cut back across the board on essentials and non-essentials in the previous month, in a sign that rising costs had begun to hurt people’s budgets.
People have decreased spending on subscriptions, DIY and gardening, and dating since last year, reflecting a shift in priorities when it comes to non-essentials, it added.
This suggests that, despite the tough times facing consumers, many are seemingly throwing caution to the wind this summer knowing it may well be a bit of a final hurrah before the costs bite in this autumn— Mark Nalder, Nationwide Building Society
Furthermore, spending to pay off debts such as credit cards and loans was up by 13% on July last year and 5% compared with June. This increase shows more people have needed to resort to spending on credit to get by during the rising cost of living, Nationwide said.
The increase in spending levels also reflects higher prices for the same items compared with last year.
Fuel and electric car charging payments rocketed by 37% year on year and 7% compared with June amid soaring petrol and diesel costs, while spending on utilities and other bills like tax shot up by a fifth compared with last year and 8% month on month.
Inflation hit 10.1% in the 12 months to July as rising food and fuel costs pushed up the rate to another 40-year high.
Mark Nalder, head of payments at Nationwide Building Society, said: “Spending levels are higher this year than they were last year. However, perhaps more surprising is the increase in the total number of transactions members made in July this year compared to 12 months previous.
“This suggests that, despite the tough times facing consumers, many are seemingly throwing caution to the wind this summer knowing it may well be a bit of a final hurrah before the costs bite in this autumn.
“However, we are seeing the continuation of cutbacks against this backdrop of heightened spend, with notable drops in discretionary spend such as subscriptions, DIY, dating and gardening – all down compared to July last year.
“We should get a clearer picture of how we are coping as we head into September.”
