Consumer spend growth hit a three-year high of 4.5% during the second quarter of the year, with spend on hotels rising 6.9%, according to the latest Barclaycard Consumer Spending Report.
The report showed that spend on travel increased 8.4% – its highest level since Q2 of 2013 – as confident consumers benefited from wage growth, higher employment levels and low inflation to drive spend on leisure and non-essential items.
While hotels enjoyed a rise of 6.9%, restaurants and pubs saw double-digit growth of 14.8% and 12.1% respectively.
And this growth looks set to continue as 43% of UK consumers say that they are more likely to holiday in Europe this year to take advantage of the weaker euro.
However the question mark hanging over Greece’s future and economic uncertainty in the Eurozone means that 26% of holidaymakers are opting to stay on UK soil and choosing a staycation instead this summer.
The decisive result of the General Election also had a positive impact, with almost a third (32 per cent) of consumers saying the result has buoyed their confidence in the UK’s economic future.
Chris Wood, chief operating officer, Barclaycard said: “A decisive General Election, low inflation, an uptick in earnings and improving job security all contributed to a sense of financial wellbeing among consumers in the second quarter, which in turn led to record growth in both overall and discretionary spending.
“With the UK’s economic prospects continuing to improve, and as consumers look forward to the summer ahead, spending on entertainment and leisure, large household purchases and overseas holidays was up strongly. With the strength of sterling against the euro making everything from short city breaks to two-week beach getaways more cost-effective, we expect this trend to continue into the third quarter.
“Rather than a fleeting trend, consumer spending has been growing steadily since last summer as more and more people started to believe that improvements in the macro environment were here to stay. With the UK’s economic recovery appearing now to be firmly established, households are likely increasingly to spend more on themselves and their families.”