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UK spending edges up after more people go out as Omicron eases

UK spending edges up as retail and restaurant footfall rises
UK spending edges up as retail and restaurant footfall rises Copyright Thomson Reuters 2022
Copyright Thomson Reuters 2022
By Reuters
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By David Milliken

LONDON -British consumers' spending on credit and debit cards increased slightly last week as more people went out shopping or to restaurants, according to weekly data that add to signs of a waning economic impact from the Omicron wave of COVID cases.

Britain's economy regained its pre-pandemic size for the first time in November, but economists estimate that output slipped back in December and early January, when a wave of COVID cases hit the hospitality sector especially hard.

At its peak at the turn of the year, almost 7% of the population in England was infected with COVID-19, but case rates have now fallen to under half their previous level and guidance to work from home and mask-wearing rules have largely gone.

For the past couple of weeks, figures collated by the Office for National Statistics have shown a pick-up in early measures of consumer spending and other economic activity.

Credit and debit card purchases, as measured by the Bank of England's CHAPS interbank payments system, rose to 87% of their February 2020 level in the week to Jan. 20, up from 85% the week before - although this does not adjust for seasonal variation.

Retail footfall in the week to Jan. 22 rose to 80% of its level in the same week of 2019, up 2% from the week before, while online restaurant bookings in the week to Jan. 24 were 97% of their level in the same week of 2020, up 5 percentage points on a week earlier.

Almost a third of businesses reported that their sales between Dec. 27 and Jan. 9 were below normal for the time of year, something which most of them blamed on COVID, while 15% said Brexit difficulties played a role.

Nearly 60% of hotels and restaurants said sales were below normal, and more than 80% of 'other service activities' which includes businesses such as hairdressers and beauticians.

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