UK shoppers kept spending in July even with the uncertainty over the economy in the aftermath of the vote to leave the EU.

Visa said card data showed spending increased by 1.6 per cent in July compared to July 2015, up from a 0.9 per cent increase in June. This was the biggest rise in three months.

Seasonally adjusted spending increased 1.1 per cent, the strongest month-on-month gain since January, reversing a 0.5 per cent decline in June.

Visa warned that monthly data can be unreliable and that the picture across three months of spending showed that customers were still being careful about their spending.

“July’s data suggests that UK consumer spending is holding up despite the ongoing uncertainty following the referendum, albeit at lower levels of growth than we’ve seen in the last couple of years,” said Kevin Jenkins, Visa’s managing director for Britain and Ireland.

Not all measures of consumer confidence have held up so well since the EU referendum on June 23.

An early “Brexit special” reading from GfK in the wake of the June 23 poll pointed to the biggest fall in confidence since 1994 and was one of the first data signals of the likely negative economic toll of the vote.

A later reading for July showed that the index had plunged from minus nine to minus 12, denoting the largest monthly decline in confidence since March 1990.

The European Commission’s consumer confidence gauge for Britain also suffered its biggest monthly drop in July since January 1991, hitting its lowest level since June 2013.

The month-on-month drop in business activity was the largest observed since the survey began in July 1996.

The service sector makes up 80 per cent of UK GDP, but it is not the only sector in decline.

Construction has slowed at it’s fastest pace since 2000 and manufacturing at its fastest pace since 2013, giving the first full picture of how the UK economy has reacted to the shock result of the EU referendum.

Source: The Independent