New Cars Help Push U.K. Household Spending to Pre-Crisis LevelsBy and
What is your biggest expense? For Britons, it’s getting around.
U.K. household spending -- excluding mortgage payments -- rose to 554.20 pounds ($770) per week in the financial year ending 2017, climbing back to pre-crisis levels of more than a decade ago for the first time, according to a report by the Office for National Statistics on Thursday. Transport accounted for the biggest proportion of expenditure at 79.70 pounds, exceeding even housing and recreation.
The move was partly driven by consumers increasing their spend on new vehicles, with the percentage of households that own a car or van rising by 3 percentage points over the last three years to reach 79 percent, the ONS said. It noted the popularity of personal contract purchase plans -- a loan product the Bank of England has been watching with concern.
Overall, the ONS said the rise in spending may have been bolstered by inflation, which surged to a 5 1/2-year high toward the end of last year -- encouraging households to bring forward certain purchases. Record employment, increased disposable income and low interest rates discouraging saving and boosting borrowing also likely contributed, it said.