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Spending picks up but confidence still ‘fragile’

Consumer spending picked up in July, figures from Visa show. But its first post-referendum spending report shows that growth was still slower than at the start of the year.

The monthly index, compiled with the financial data company Markit, showed consumer spending rose 1.6 percent year-on-year in July, up from a growth rate of 0.9 percent in June.

Kevin Jenkins, UK & Ireland managing director at Visa, said: “July’s data suggests that UK consumer spending is holding up despite the ongoing uncertainty following the referendum, albeit at lower levels of growth than we’ve seen in the last couple of years.

“Looking at the last three months, the index indicates that consumers remain cautious with their spending. Overall growth is hovering nearly one percentage point below the average seen over the past two years.”

Annabel Fiddes, economist at Markit, said the outlook for spending was clouded by fragile consumer confidence.

“Although the July data point to signs of improvement, anxiety around Brexit and a slowing private sector economy may pose further downside risks to expenditure growth for the rest of 2016,” she said.

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