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Consumer spending up despite slowdown

Chris Hughes,Financial Editor
Saturday 30 March 2002 01:00 GMT
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Spending on credit and debit cards soared to almost £16bn in February, demonstrating the continuing willingness of consumers to spend despite the prevailing economic uncertainty.

The data came as shopkeepers prepared for the DIY industry's busiest trading period. According to the retail consultancy Verdict, shoppers will spend £380m – or £16 per household – on DIY over the Easter holiday.

Credit and debit card spending rose 4 per cent over the course of February to end the month 15 per cent up on the same time last year, according to the Credit Card Research Group. Debit card transactions were up 18 per cent at £8bn, while credit card spending rose 12 per cent to £7.9bn.

Rising house prices and historically low levels of unemployment, underpinned by interest rates at a 38-year low, have encouraged Britons to rack up debts despite a wave of bad news on the corporate front, which continued this week as Consignia announced 15,000 job losses and ITV Digital went into administration.

Outstanding borrowing on credit cards stands at £40bn, with total household debt in the UK now reaching about £720bn.

The Credit Card Research Group, which compiled the figures, said people were not overextending themselves and debt levels "remained manageable".

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