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This week’s roundup includes a record rise in festive grocery spending, a sharp slowdown to UK house price growth, the first drop in new car sales in six years and concerns over weak consumer spending. 

Festive food spending ‘up by £1bn from 2016’

Consumers spent £1 billion more on groceries in the final quarter of 2017 than the year before, according to figures from market researcher Kantar Worldpanel. The data revealed that the average household spent a record £1,054, with £469 million spent on premium own-label lines. 

The Kantar statistics also revealed that the Friday before Christmas (22nd December) was the busiest grocery shopping day ever recorded, with £747 million spent across the UK. 

Fraser McKevitt, Head of Retail and Consumer Insight at Kantar, said: “Shoppers are splashing out despite fewer promotions to tempt them. 

"Only 36% of spending was on items on offer this year - the lowest level of promotional activity at Christmas since 2009."

Tesco was reported as the fastest growing of the big supermarkets over the period, with sales up by 3.1% over the 12 weeks, while Lidl and Aldi were level in the chase to become the country’s fastest-growing supermarket overall. 

House price growth ‘sees sharp slowdown in 2017’

UK house prices increased significantly more slowly in 2017 than in the previous year, according to data from Halifax. Figures from the UK’s largest mortgage lender revealed prices rose by 2.7% in 2017, compared with a 6.5% upturn in 2016.

Halifax pointed to a squeeze in real wage growth and continuing economic uncertainty as the reasons for the slowdown. At the end of 2017, the average UK house price was £225,021. 

The figures echo a recent release from Nationwide, which suggested prices rose by 2.6% in 2017. During the month of December 2017, Halifax stated prices actually declined by 0.6%, the first monthly decline since June last year. 

However, Halifax remained positive that house prices would continue to rise in 2018. 

Russell Galley, Managing Director of Halifax Community Bank, said: “Nationally house prices in 2018 are likely to be supported by the ongoing shortage of properties for sale, low levels of housebuilding, high employment and a continuation of low interest rates making mortgage servicing affordable in relative terms.”

UK car sales ‘see first drop in six years’

Sales of new cars fell for the first time in six years in 2017, as demand for diesel cars declined by almost a fifth. That is according to the Society of Motor Manufacturers and Traders (SMMT), which revealed a total of 2.5 million cars were registered in the 12-month period. 

The industry body said that the figure was down 5.7% from 2016, while sales of diesel cars fell by 17.1% as higher taxes and pollution fears affected demand.

In addition, it was reported that carbon emissions from new cars increased for the first time in two decades, rising by 0.8% compared to 2016. SMMT Chief Executive Mike Hawes said the latest low-emission diesel cars were “vital” in meeting climate change targets

He also predicted car sales would continue to drop in 2018, estimating a 5-7% fall. Mr Hawes blamed the sales decline on declining confidence among both businesses and consumers.

UK consumer lending ‘weakest since 2015’

British consumers increased their borrowing by the smallest amount since mid-2015 during the three months to November 2017, according to new Bank of England (BoE) data. Figures released by the BoE suggested households across the country had reined in spending as the UK saw lacklustre growth for most of 2017.

The central bank said unsecured consumer lending in the three months to November increased at an annualised rate of 8.5%, down from the 9.3% in the three months to October, representing the weakest growth since June 2015.

In cash terms, borrowing was up by £1.4 billion in November alone, compared with economists’ forecasts of a £1.5 billion rise in a Reuters poll.

The BoE raised interest rates for the first time in more than a decade in November 2017, reversing a cut made in August 2016. It indicated that further increases were likely in the coming years in order to keep inflation under control. 

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