Spending by British households has returned to its pre-financial crisis levels in real terms, driven by purchases of cars and spending by older consumers on package holidays and pets.
Figures from the Office for National Statistics showed average weekly spending in the UK rose to £544 in the financial year ending March 2017, an increase from £533 the previous year. Transport and recreation were the two categories where expenditure increased the most, rising by about £5 on average per week.
The gains are significant because they show spending returned to its pre-financial crisis levels, after taking account of inflation, amid improving economic conditions in a period that included the Brexit vote. Still, prices have risen sharply, outrunning wage growth, since the data was gathered – and levels of consumer spending are now starting to slow on average.
The increase in spending outstripped the growth in disposable income over the course of the year, with expenditure increasing by 5.3% as the amount of money available for people to spend rose by 2.3%, the ONS said.
Transport expenditure was the biggest single category for average weekly spending, with the running costs of vehicles – such as petrol, diesel and repairs – taking up the biggest proportion. Purchases of vehicles was the second largest, followed by public transport costs.
Recreation and culture was the second highest category for average spending for the first time, with people aged between 65 and 74 spending nearly a fifth of their total expenditure on this category, far outstripping younger people who spent only 10%. Statisticians said package holidays and pets were the biggest areas for older people.
Housing and fuel was the third largest category, with average weekly spending of about £72.60 per week. However, officials do not include mortgage payments, council tax and insurance in calculations. If they did, housing would have been the top category, with average weekly spending of about £173.40, up from £164.70 a year ago.
Robynne Davies, senior ONS statistician, said average weekly spending varied considerably across the country, with more than £200 difference between the highest and lowest spending areas.
“The increases [by category] are across the board, but it’s also on more discretionary items such as recreation and culture and hotels,” she added.
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