Muted spending growth continues in July
Adjusting for seasonality and prices, spending excluding energy rose by 0.6% in July compared to June, driven by both higher retail and service spending. The overall picture shows real spending has remained largely flat for most of 2025 so far, despite some significant swings in the spring and early summer.
Services spending remained muted in July. This reflects real declines in holidayrelated spending such as hotels, travel agencies and tourist attractions, as nominal spending holds up but prices soared – especially in packaged holidays and hotels. However, real spending on other services, including restaurants, bars and nightclubs, as well as beauty salons and barbershops, saw modest gains.
In retail, the moderate real growth we have seen this year continues. Once again, nominal spending in grocery stores rose slowly, while real spending continues to be dampened by rising prices. This indicates that consumers are very conscious of limiting the pass-through of higher prices when they go grocery shopping. Real spending at DIY stores, clothing stores and shoe stores saw an increase.
Overall, spending growth has been very muted in 2025, reflecting a high degree of cautiousness among consumers and weak sentiment due to inflation fears and global turmoil. This leaves significant potential for higher spending growth, as households have grown their savings considerably in recent years, and they continue to benefit from tailwinds from the housing market, the labour market and rising real incomes.
Author
Danske Research Team
Danske Bank A/S
Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.
