Spending on travel and entertainment grew by 8% last month as more families took summer holidays, according to Barclaycard.

After years of cutting back spending on discretionary items, consumers spent “considerably more” on travel in July – including 8% more on hotels, 4% more at travel agents and 2% more on airline tickets.

Overall consumer spending was up by 3.5% year-on-year in July as households spent more on holidays and entertainment and updated their summer wardrobes, according to the latest monthly update from Barclaycard.

July was the fourth month in a row of real growth in spending.

Research by Barclaycard found the uplift in spending was prompted by improved confidence in people’s finances.

More than half (55%) of consumers said they felt “confident about their personal financial situation” and believed it “will improve over the coming twelve months”.

Seventy per cent felt confident about living within their means and almost one in five said they were planning on spending more on holidays over the next year (19%).

Despite increasing confidence, spending on everyday essentials remained squeezed as consumers have become accustomed to a ‘new normal’ – closely monitoring expenditure and looking for ways to make their money go further.

Almost six in ten people asked believe petrol and groceries will see the biggest jump in costs over the next three months.

Just under half (49%) expect the cost of living to rise, and major household bills to either remain the same or rise, in the coming 12 months.

Barclaycard managing director Chris Wood said: “As official figures show that the UK economy has finally recovered to its pre-crisis size, the growth in spending in July is a big boost for retailers after months of lacklustre performance.

“The extra spending on travel and entertainment was not only beneficial to businesses in those sectors but led to strong increases in spending on clothing and at department stores, creating a positive knock-on effect on the wider high street.

“Though it’s still early days, with half of UK consumers saying that they are confident about their personal financial situation, we could well be seeing the start of a spending recovery.”