Spending up despite rate rise

Consumer spending jumped 7 per cent year on year in July despite soaring oil prices and rising interest rates.

The Census and Statistics Department released figures showing retail spending reached an estimated $17.4 billion during the month. Once price rises are accounted for, sales increased by 5.6 per cent, or $16.5 billion.

A spokesman from the department said an improvement in employment conditions, inbound tourism and healthy development of the property market had all benefited retailers.

Citigroup senior economist Joe Lo said yesterday the bank was surprised by the robust growth in spending.

'Confidence in the market remains very high despite rises in interest rates and oil prices,' Mr Lo said.

Sales of electrical goods and photographic equipment saw the biggest increases, followed by furniture and other general goods.

'The opening of Hong Kong Disneyland will lift consumer sentiment and stimulate spending in the coming months,' a government spokesman said.