Consumer spending power rises
Spending power was 4.4% higher in May than at the same time last year and income growth was the biggest driver of the increase in spending power.
However, growth in essential spending increased as utility bills rose and regular debt payments fell at a slower rate than in recent months.
Consumer sentiment continues to improve, albeit from a very low point, with the number of people believing their personal finances have improved increasing for a second consecutive month.
Patrick Foley, chief economist at Lloyds TSB, said: “Looking beyond the April data that has been affected by the timing of holidays, growth in spending power appears to be back in line with the improving trend seen since the beginning of the year.
“It is interesting to note that income growth has been the main driver of growth, indicating a recent strengthening of the labour market, rather than a fall in consumers’ essential spending commitments, which continue to grow.”