People spent more money and transacted more last month as they made the most of the warm weather and the start of summer vacation, according to Nationwide’s monthly member spending report.
Consumers spent more on holidays, leisure activities like watching sporting events and shopping for new clothes in July amid a spell of warm UK weather.
Meanwhile, spending on food and drink was up 8% from June as people enjoyed socializing with family and friends in pubs and restaurants, the building society found.
It came after households slashed essential and non-essential items across the board in the previous month, a sign that rising costs had started 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, he added.
This suggests that, despite the tough times facing consumers, many seem to be throwing caution to the wind this summer, knowing that it could well be one last hurrah before costs bite this fall.
Additionally, spending to pay off debts such as credit cards and loans was up 13% from July last year and 5% from June. The increase shows that more people have had 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 to last year.
Fuel and electric car charging payments soared 37% year on year and 7% from June amid rising gasoline and diesel prices, while spending on utilities and other both bills and taxes were up one-fifth year-over-year and 8% month-over-month. .
Inflation hit 10.1% in the 12 months to July as rising food and fuel prices pushed the rate to a new 40-year high.
Mark Nalder, payments manager 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 made by members in July this year compared to the previous 12 months.
“It suggests that, despite the tough times facing consumers, many seem to be throwing caution to the wind this summer, knowing that it could well be one last hurrah before costs bite this fall.
“However, we are seeing continued reductions against this backdrop of increased spending, with notable declines in discretionary spending such as subscriptions, DIY, dating and gardening – all down from July last year. .
“We should have a clearer picture of how we are doing as we head into September.”