SIGNS OF HOUSEHOLD OPTIMISM AS SPENDING ON LEISURE INCREASES, TSB REPORT SHOWS

Spending on holidays and entertainment saw an increase in the first half of this year compared to the same period in 2023, according to an analysis of customers' shopping habits by TSB,

However, the research indicated that households were cutting back on home renovations and DIY projects. TSB's analysis involved more than 425 million debit card transactions between January 1 and June 30, which were then compared with the same period in 2023.

The bank noted a 9.2% rise in the total value of spending with airline and travel companies. Spending on entertainment, including concert tickets, theme parks, and visits to cinemas and theatres, increased by 5.1%, while amusement parks saw a whopping 20.2% jump. Pub spending was also up by 7.2% compared to a year earlier.

However, there were indications that some households were postponing renovations and home improvement projects, with overall spending for DIY, electrical and furniture items dropping by 15.5%. Spending on clothing also took a hit, decreasing by 4%.

Signs of food prices continuing to impact household budgets were evident, with supermarket spending increasing by 3.4%. In addition to the analysis, TSB commissioned a survey which found that over half (57%) of people are feeling confident about their personal finances over the next six months.

However, a quarter (25%) believe they will face greater financial challenges. Just over two-fifths (42%) are not planning to spend more in the second half of the year, according to the Censuswide survey of 2,000 people across the UK in June.

Economists are forecasting a cut in the Bank of England base rate from its 16-year peak of 5.25% to 5% when the next vote rolls around on August 1. This anticipated move could spell relief for certain mortgage holders, though those transitioning off fixed rates may still face steeper payments than before.

TSB's head of loans and credit cards, Delphine Emenyonu, commented: "While many household budgets are under pressure, consumers are remaining optimistic with many prioritising spend on treats such as holidays and entertainment. Consumers are feeling more confident about their finances, and with a potential interest rate cut later in August, we may see increased spending levels in the second half of the year."

2024-07-10T07:58:11Z dg43tfdfdgfd