UK spending edges up after more people go out as Omicron eases

2/2 © Reuters. FILE PHOTO: A woman shops at a Sainsbury's supermarket, amid the spread of the coronavirus disease (COVID-19), in London, Britain January 11, 2021. REUTERS/Hannah McKay/File Photo GLOBAL BUSINESS WEEK AHEAD 2/2

By David Milliken

LONDON (Reuters) -British consumers' spending on credit and debit cards increased slightly last week as more people went out shopping or to restaurants, according to weekly data that add to signs of a waning economic impact from the Omicron wave of COVID cases.

Britain's economy regained its pre-pandemic size for the first time in November, but economists estimate that output slipped back in December and early January, when a wave of COVID cases hit the hospitality sector especially hard.

At its peak at the turn of the year, almost 7% of the population in England was infected with COVID-19, but case rates have now fallen to under half their previous level and guidance to work from home and mask-wearing rules have largely gone.

For the past couple of weeks, figures collated by the Office for National Statistics have shown a pick-up in early measures of consumer spending and other economic activity.

Credit and debit card purchases, as measured by the Bank of England's CHAPS interbank payments system, rose to 87% of their February 2020 level in the week to Jan. 20, up from 85% the week before - although this does not adjust for seasonal variation.

Retail footfall in the week to Jan. 22 rose to 80% of its level in the same week of 2019, up 2% from the week before, while online restaurant bookings in the week to Jan. 24 were 97% of their level in the same week of 2020, up 5 percentage points on a week earlier.

Almost a third of businesses reported that their sales between Dec. 27 and Jan. 9 were below normal for the time of year, something which most of them blamed on COVID, while 15% said Brexit difficulties played a role.

Nearly 60% of hotels and restaurants said sales were below normal, and more than 80% of 'other service activities' which includes businesses such as hairdressers and beauticians.