UK Consumer Spending Contracts in February, Confidence Rises
Consumer spending across the UK took a sharp hit during the month of February on account of the lockdowns and restrictions owing to the fresh wave of the coronavirus pandemic, but consumer confidence in the economy soared to a one-year high. According to Barclaycard, consumer spending declined by 13.8% YoY in February after declining by 16.3% during the previous month.
During the lockdown period, consumers spent more on the purchase of essential items, which increased by 5.3% last month, even as shopping for non-essential items declined by 22.1%. With most businesses still shut owing to the lockdown measures in place, consumers increasingly turned online for their grocery shopping needs.
Despite the decline in consumer spending, shoppers across the UK have expressed a higher level of confidence in the overall economy. Consumer confidence improved from 24% in January to 28% in February – the highest reading seen since the coronavirus pandemic struck last year.
On a more promising note that indicates a general improvement in outlook in the near future, consumers have started making plans for spending the additional savings generated by staying at home. Around 20% of the consumers who had increased their savings over the past several months are looking forward to spending on holidays and treats in the coming months after the pandemic is contained.
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