Recreation and leisure spending suffers summer dip, says Visa report

Spending on recreation and culture has suffered a "dramatic slowdown" in the third quarter of the year, rising just 0.4% on a year ago, compared with a 7.5% increase for the year to the end of June, according to figures published by Visa Europe . The payments organisation, which accounts for £1 in every £4 spent in the UK, says that discretionary spending on items such as holidays, going to the cinema and theatre, along with consumer goods such as cameras and video games, have flattened during the summer holidays and early autumn. However, the increase in spending on hotels and restaurants also slowed but remained strong, falling from 13.9% at the end of the second quarter to 9.8% at the end of September, and the increase in spending on clothing and footwear fell from 17.6% at the end of Q1 to 12.1% at the end of the third. Overall spending on Visa's 91 million credit, debit and pre-paid cards in the UK grew year on year for the fifth consecutive quarter, but at the slowest rate for any quarter so far in 2010. A total of £87.6bn was spent on Visa cards in the third quarter, compared to £82bn in the second quarter. Philip Symes, chief financial officer for Visa Europe, said that the organisation's UK expenditure index showed that Britons were "spending quite well, at robust levels". "The slowdown from Q2 to Q3 shows there is obviously some concern about the economy, but we're still expecting some growth going forward. The expectation is that GDP will be sluggish, but not that we will go into a double dip," he said. Last week the deputy governor of the Bank of England Charlie Bean called on Britons to go out and spend to help invigorate the UK's economic recovery. Bean, who sits on the Bank's monetary policy committee, admitted that the base interest rate was being held at 0.5% to encourage savers to use their money and reinflate the economy. But Symes said that although total spending has recovered to pre-recession levels, the rate of growth is flattening, indicating that consumer spending may not play a major role in the further recovery of the economy.