One category that managed to coax us off the sofa last quarter was entertainment, which grew by 4.3% – it was the only category in the hospitality and leisure sector that performed better in Q2 than in Q1. Nothing sums up this trend quite like Taylor Swift’s Eras Tour, which landed in the UK in June. Back in May, we estimated that those attending the tour would spend an average of around £848 each on tickets, travel, accommodation, outfits and other expenses.

The Eras Tour returns to London next month, which is sure to benefit Wembley’s hospitality businesses, and Swift’s inflationary impact has reportedly been a consideration ahead of tomorrow’s base rate decision.

Trends like ‘Swiftonomics’ often punch well above their weight when it comes to the public consciousness, and I think that’s because we’re always fascinated by the influence celebrities can have on the way we live our lives, and how we prioritise our spending. 

We also observed progress in some longer-term trends in how consumers are purchasing products and services. In the early days of the pandemic, many of us made the move to online shopping, and at its peak during the national lockdown in January 2021, online spending accounted for just over 58p in every pound. This shift left big question marks about the future of the High Street.

However, over time we’ve actually seen a bounceback in in-person spending, which may sound surprising given the normalisation of remote and hybrid working patterns. For example, in Q2 this year, online spending made up just 45p in the pound. It’s a similar picture when it comes to groceries – online spending peaked at 18.3% in early 2021, and it’s now down to 13.0%. Even when we focus on the short term, all categories saw a shift in the ratio of spending from online to in-store going from Q1 into Q2.

In April, we began publishing data looking at consumer spending on housing costs, from utilities and household retail, to mortgage and rental payments.

The good news for households is that the cost of rent and mortgages stabilised considerably in June, increasing by just 1.5% year-on-year – the slowest rate of growth since March 2023 – following a 6.3% year-on-year increase in May.

On top of that, we began to see the positive impact of Ofgem’s latest energy price cap decreases – consumer spending on utilities fell -12.5% in May, by June it had dropped -15.6%, and that’s before we factor in the -7% drop in the price cap that came into effect on 1 July.

From a spending analysis perspective, there weren’t many stand-out winners and losers in Q2, but what is clear from the data is that times are still tough. Families are continuing to pay close attention to their outgoings and savings, and the cost of living is still stifling demand for non-essential items.

Encouragingly, the rate of inflation was just 2% in the year to June 2024, in line with the Bank of England target, so we could be close to a point of stabilisation. Moreover, while the general election may not have had an immediate impact on consumer spending, my hope is that it demonstrated to businesses worldwide that the UK offers a secure and stable place where they can invest, compared to the political instability that’s been seen in some areas of mainland Europe. As prospects for the UK improve, so too will consumer sentiment, and – in time – consumer spending.

We’ll be keeping a close eye on key indicators like our transaction data – as well as external factors such as the Monetary Policy Committee’s base rate decisions, and the policies that Labour announces in the upcoming October budget – to distinguish between short-term purchasing patterns, which can change as easily as the weather, and fundamental behaviour changes.