The key chart
The key message
The message from the UK money sector is that the “Christmas Spirit” is very much alive, albeit in a slightly muted fashion compared to last year.
Monthly and weekly credit and debit card payments show increased activity in line with expected, pre-Christmas trends. Aggregate spending increased 5ppt from 101% of pre-pandemic levels (PPLs) in October 2022 to 106% PPLs in November 2022. On a weekly basis, aggregate spending rose 13ppt from 108% to 121% in the week to 1 December 2022.
The largest increases in spending were on so-called “delayable” items (including Christmas presents?). They rose by 14ppt on a monthly basis from 86% PPLs in October 2022 to 100% PPLs in November 2022 and by 22ppt on a weekly basis from 107% PPLs to 129% PPLs.
Again, these developments are in-line with expected, pre-Christmas trends. They are also supported by personal, anecdotal evidence of walking through a teeming Westfield Shopping Centre in Stratford, London yesterday on way to the highly recommended “ABBA Voyage” concert!
While aggregate card payments are up slightly on a YoY basis (2ppt), spending on delayable items is lower. Monthly and weekly payments on delayable items are down by 6ppt and 8ppt respectively over the past year. This is not surprising given the re-allocation of UK spending towards “work-related” and “staples” as a result of the impact of rising inflation on fuel, energy and food prices etc.
In short, inflation has dampened Christmas spirit in the UK, but it has not killed it off!
Please note that the summary comments and charts above are abstracts from more detailed analysis that is available separately.