Signs of household optimism as spending on holidays and entertainment increases

Spending on holidays and entertainment increased in the first half of this year compared with the same period in 2023, according to TSB analysis of customers’ shopping habits.

But households cut back when it came to spending on home renovations and DIY projects, the research indicated.

TSB analysed more than 425 million debit card transactions between January 1  and June 30 and compared them with the same period in 2023.

The bank recorded a 9.2% increase in the total value of spending with airline and travel companies.

Spending on entertainment, including concert tickets, theme parks and cinema and theatre visits, increased by 5.1%, while amusement parks jumped by 20.2%. Spending in pubs was 7.2% higher than a year earlier.

But there were signs of some households putting off renovations and home improvement projects, with overall spending for DIY, electrical and furniture items falling by 15.5%.

Spending on clothing decreased by 4%.

There were also signs of food prices continuing to impact on household budgets, with supermarket spending increasing by 3.4%.

TSB also commissioned a survey which found that over half (57%) of people are feeling confident about their personal finances over the next six months.

A quarter (25%) believe they will face greater financial challenges.

Just over two-fifths (42%) are not planning to spend more in the second half of the year, according to the Censuswide survey of 2,000 people across the UK in June.

Economists have predicted that the Bank of England base rate will be reduced from the current 16-year high of 5.25% to 5% at the next vote on August 1.

This could help to ease costs for some mortgage holders, although many homeowners coming off fixed rates will still end up paying significantly more than previously.

Delphine Emenyonu, head of loans and credit cards at TSB, said: “While many household budgets are under pressure, consumers are remaining optimistic – with many prioritising spend on treats such as holidays and entertainment.

“Consumers are feeling more confident about their finances, and with a potential interest rate cut later in August, we may see increased spending levels in the second half of the year.”