Households' spending returns to pre-economic downturn levels

Households' spending has returned to levels seen before the economic downturn, official figures show.

Average weekly household spending rose to £554.20 in the financial year ending 2017, with transport being the top spending category at nearly £80, the Office for National Statistics (ONS) said.

There is also evidence that families are forking out more on package holidays abroad.

Commentators suggested the figures show families largely "shrugged off" any immediate post-Brexit vote jitters.

After adjusting for inflation, weekly household spending has not been this high since the financial year ending 2006, the report said.

There is also a £200-a-week spending gap between households across the UK, reflecting varying incomes and costs.

In London, households spend around £643.70 per week, while in the North East of England they spend around £437, figures covering the period 2015 to 2017 show.

In Scotland, the average household spend is £492.30, in Wales it is £458.70 and in Northern Ireland it is £497.10.

Across the UK, households spent an average of £79.70 a week on transport in the financial year ending 2017 - a "highly significant" increase of £5.40 in real terms when compared with the previous year, the ONS said.

Transport includes purchasing vehicles, running costs and services such as public transport and air fares.

The ONS said within these categories the highest spending rise was on the purchase of vehicles.

It said there has been an increase in spending on cars bought outright and cars bought on a hire loan purchase scheme, commonly referred to as Personal Contract Purchases (PCPs).

Recreation and culture was the second highest spending category, accounting for £73.50 a week of average household spending.

This was a £5-a-week increase when compared with a year earlier in real terms.

The increase was largely driven by an increase in spending on package holidays abroad, the ONS said.

Households containing people aged 65 to 74 spend nearly a fifth (18%) of their total outgoings on recreation and culture - making it the top spending category for this age group. This compares with 10% for the under-30s.

And recreation and culture was the top spending category for households in the North East, the North West and Yorkshire and the Humber.

The latest report marks 60 years of UK household expenditure surveys.

Looking at how spending trends have changed, the ONS said the proportion of total spending on housing, such as mortgages, rent and repairs, has doubled during the last 60 years, from 9% to 18%.

But on the other hand, the proportion of total expenditure on food has halved from 33% to 16%, as has the proportion of total expenditure on clothing, from 10% to 5%.

This may be due to a broader choice of goods and services for consumers offered at a wider range of prices, the ONS said.

In 1957, average weekly household expenditure on tobacco made up 6% of total spending - but by 2017 this was down to 1%, mirroring a decline in the popularity of smoking.

Meanwhile, the proportion of household spending that goes on alcohol is the same as it was 60 years ago, after fluctuating over the decades.

In 1957, the proportion of total expenditure on alcohol was 3%, before rising to 5% in the 1970s and 1980s.

The most recent data shows the proportion of total expenditure on alcohol was back at 3% - the same as in 1957.

Commenting on the figures, Stephen Clarke, policy analyst at the Resolution Foundation, said: "Today's figures confirm that families largely shrugged off any immediate post-EU referendum jitters and went spending."

He continued: "More recently, rising prices and squeezed incomes have put the brakes on Britain's big spending households."

Simon Hopkins, chief executive of charity Turn2us, said: "High numbers of people seeking our help are living without essential household appliances such as a cooker or fridge and this is having a very serious impact on their health and overall wellbeing, as well as making it harder to manage on a limited budget."

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