With activity restarting from last spring, the economy had posted two solid quarters of growth and GDP was closing in on pre-pandemic levels, with that gap predicted to be eliminated at the start of this year.
“The total value of contactless transactions was £15 billion in September 2021, this is a 30.1% increase on £11.5 billion in September 2020 and 114.6% increase on £7 billion in September 2019.” – UK Finance Card Spending Update Dec 2021
The following data is from UK Finance from their most recent card spending update (December 2021) We have included the 2019 figures to show context and for comparison. Comparing the data to 2019 figures shows that card spending has been on a steady increase:
There were 1.9 billion debit card transactions in September 2021
There were 321 million credit card transactions in September
The number of contactless credit card transactions
The number of contactless debit card transactions
The total value of contactless transactions was £15 billion
Forecasts and the Outlook for 2022
Covid-19 has proven to be unpredictable for the economy and consumer spending over the past two years and with the new Omicron variant emerging at the end of 2021 there have been new concerns about the affect of the pandemic on the economy. The Omicron variant showed signs of rapid spread and public health measures were reintroduced. Working from home, mask wearing and regular testing leading up to Christmas meant individuals took a more cautious approach to their spending, either as a voluntary measure or due to the need for self-isolation.
It is estimated that it will be a few months before we can view the full impact of Omicron on household and consumer spending but there are some indications that the new variant caused a decrease in activity towards the end of 2021. “Footfall on the high street was down in the run up to Christmas and consumer confidence continued to be more subdued compared with that seen earlier in the summer.”
“While the recent Covid-19 developments will likely delay the UK economy’s return to pre-pandemic levels, so far at least, it does not look like it will put growth into reverse. The average independent forecast for UK GDP growth in 2022, as reported by HM Treasury, was 4.7% in December, with household consumption continuing to be the main driving force this year.” – UK Finance
However, the UK and global economy will likely to continue to face a wide range of challenges to growth in 2022 and into 2023.
The outlook for the labour market is looking positive. The initial fear of large numbers of unemployment caused by the Furlough Scheme ending has shown no signs of materialising. Labour market prospects are looking better now than at any point in the pandemic. The way businesses and consumers has responded in the past two years to the uncertainty of the economy does show that the UK has the resilience to enter into 2022 and 2023 and the central forecast is that output recovery will be steady.