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Households make fewer transactions but spending stays level as rising costs bite
23 May 2022, 15:14
Nationwide Building Society’s members made five million fewer transactions in April than the previous month, but spent a similar amount to March.
Households made fewer transactions in April, but the amount they spent did not drop, in a “clear sign” of the impact of rising prices, according to Britain’s biggest building society.
The Nationwide Building Society’s members made around five million fewer transactions than they did the previous month.
Some 212 million transactions made in April compared with just over 217 million in March.
Despite the drop in the number of transactions, the total amount spent by members in April remained broadly similar to March, Nationwide said.
This suggests that while people may be trying to cut back on the number of purchases they make, the cost of what they are buying has increased.
Spending on holidays, cruises and airline travel as well as eating and drinking out and leisure remained higher than a year earlier, reflecting the easing of Covid-19 restrictions.
Spending on essentials was also higher than a year ago, reflecting increased costs, particularly around fuel, food and utilities, Nationwide said.
There was month-on-month growth in some spending categories in April, including on gardening and clothing.
There was a 10% month-on-month fall in the amount spent on subscriptions in April, perhaps reflecting some households’ attempts to cut back on bills.
Spending on charities was also down compared with March, although charity spending remained higher compared with April 2021.
Mark Nalder, head of payments at Nationwide Building Society, said: “We’ve seen a drop in the number of transactions made by members during the month.
“However, with spend remaining at the same level, it is a clear sign of rising costs for goods and services – both those that we need and those that we want.
“This is more than offsetting the reduced number of transactions people are making and something we continue to watch.”
He said that with 9% inflation, “household finances are really feeling the pinch”.
Mr Nalder continued: “It’s therefore perhaps no surprise that people are trying to make cutbacks where and when they can, in order to save money and divert it towards paying the big bills.
“As we head into the summer months, it will be interesting to see how people balance the need to save money with the want to enjoy their life with family and friends, especially with the upcoming Queen’s Platinum Jubilee bank holiday weekend.
“However, we do expect overall spending to shrink slightly in the months ahead as the rising cost of living continues to mount pressure on household finances.”