UK consumer spending hit

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    LONDON- British consumers cut back heavily on spending as they spent a second month in a COVID-19 lockdown in February but confidence in the economy hit a 12-month high, payment card firm Barclaycard said.

    Consumer spending was 13.8 percent lower than a year before, similar to January’s plunge of around 16 percent, Barclaycard said.

    Spending on essential items grew 5.3 percent and online grocery shopping surged. But spending on non-essentials plummeted 22.1 percent with many businesses still closed.

    After suffering its biggest slump in three centuries last year, Britain’s economy is expected to grow strongly once the COVID restrictions are lifted between now and late June.

    Barclaycard said a survey which it had commissioned showed consumers’ confidence in the wider economy rose by 4 percentage points to 28 percent, its highest point since the pandemic hit last year.

    Many people were thinking about where to spend the savings they had racked up while stuck at home. A fifth of those who had saved more than normal said they would take a big holiday and 13 percent planned treats for themselves.

    The survey of 2,003 people was conducted between Feb. 19 and Feb. 22, before finance minister Rishi Sunak announced an extension of support for households and businesses in a new budget plan last week.

    The Bank of England is watching to see how much of the big increase in household savings is spent as it tries to gauge the likely strength of the economy’s bounce-back. – Reuters