UK ATM withdrawals indicate heavy Christmas spending

Source: Link

Cash machine withdrawals so far this December point to strong Christmas spending at UK retailers, according to new research released by Link, the UK ATM network.

The data covers cash withdrawals from more than 64,000 LINK cash machines around the country in the period up to 10 December 2007. It shows that so far this month, average daily cash withdrawals are up by seven per cent on November, compared with an average of five per cent for this period in the previous four years.

This means that in December so far, more than £3.2 billion in cash has been withdrawn from LINK cash machines - an increase of £140 million compared with the same period in 2006.

Increase in average daily cash withdrawals from November to December (based on figures up to 10 December 2007)
  • 2003 - 5.07%
  • 2004 - 5.21%
  • 2005 - 5.42%
  • 2006 - 5.47%
  • 2007 - 7.13%


Richard Snook, economist at the Centre for Economics and Business Research (CEBR), who has examined the LINK data, said, "The evidence so far from the LINK network is that despite the current economic uncertainty in the housing and credit markets, consumers are confidently withdrawing money, which we believe points to a good Christmas in store for retailers. Consumer confidence is also likely to have been boosted by last week's timely interest rate cut by the Bank of England. Data for this period show that cash withdrawals since Friday 7 December have been particularly high, suggesting that mortgage holders may have been encouraged to spend more freely following the rate cut."

In the past, the value of cash withdrawn from LINK cash machines has been an accurate indicator of retail spending, and the relationship between the two variables on a month-by-month basis has remained strong and relatively constant.

Richard added, "Statistical testing has shown that over the past five years, the correlation in month on month movements between retail figures and cash withdrawals has been 0.69. A correlation of one means that the two variables move in perfect synchrony and zero means there is no relationship. This relationship is particularly clear in December. Over the past five years, the whole of December has on average seen an 11 per cent acceleration in total cash withdrawals on November levels, whilst retail sales have increased by an average of 19 per cent."

Edwin Latter, LINK Scheme Director, said, "The aim of this analysis was to get an advance insight into consumer confidence in the lead up to Christmas, amidst the current economic volatility. It is of no surprise that LINK cash withdrawal figures have proven to be such an accurate measure of the mood of consumers and retail spending, given the national coverage of the LINK network and the presence of LINK cash machines on every high street. The availability of such up-to-date figures on a daily basis allows for a very precise assessment of consumer mood, as economic developments occur."

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