LONDON — UK consumer spending grew at its fastest rate for two years in the last months of 2016, according to payment card company Visa.
Its research measured cash withdrawals and card spending, and found that average year-on-year expenditure in Q4 grew by an average 2.8%, twice as high as the average rates for Q2 and Q3.
That represents the quickest quarterly growth since the last three months of 2014.
Kevin Jenkins, UK & Ireland managing director at Visa, said that overall growth was boosted by a number of Christmas-related activities and a national sales drive in November.
He said: “Growth was once again led by the experience sector, with consumers going to Christmas markets, travelling to visit loved ones, or venturing to various parts of the country to celebrate. Food was, unsurprisingly, another sector which performed well, with spend up 2.9%.”
Spending on clothing and household goods fell in December, however, after a November spike driven by “Black Friday” sales.
The UK’s vote to leave the European Union in June has created uncertain conditions for retailers.
Clothes retailer Next sent shockwaves through the industry last week when it posted falling pre-Christmas sales, and warned that profits could be as much as 14% lower next financial year.
The news drove down shares in the firm by as much as 12% in a single morning, and also hit shares in other major retailers.
Supermarkets Marks and Spencer, Tesco, and Morrisons are due to post trading updates this week, which will all be seen as bellwethers of the trading atmosphere for the coming months.