Higher January spending marks a solid start to 2026

Adjusting for seasonality and prices, spending excluding energy increased 1.0% in January compared to December, driven primarily by retail consumption. With real spending picking up towards the end of 2025, real spending excluding energy in January was 2.0% higher than in January 2025. Total spending (including energy) rose sharply in real terms in January, as the removal of electricity duties send total CPI down -0.6% m/m from December to January. 

January showed increasing spending across several retail categories, including clothing, sporting goods, jewellery and electronic stores, when adjusted for seasonality and price developments. Spending in grocery stores increased in nominal terms, but January marked an expected return to positive food inflation, which dragged down real spending growth. Real furniture spending also declined.

Real spending growth within the service sector was mixed in January. While spending in restaurants, bars, and tourist attractions rose slightly in real terms, the overall trend across other categories was less clear. Real spending increased particularly within hotels, motels, theatres, and concerts. In contrast, real spending on airlines and travel agencies decreased, despite the cold winter weather.

Overall, the real increase in total spending excluding energy in January aligns well with our expectation that households will increasingly translate real wage growth into higher real consumption in 2026, as they receive a significant additional boost from lower taxes and duties. Recent months have also shown some improvement in consumer confidence, which should support spending growth going forward. 

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