Cash withdrawals point to buoyant retail spending

By Jennifer Hill

LONDON (Reuters) - Cash withdrawals in the run-up to Christmas are up on last year, figures show, pointing to strong consumer spending despite current economic uncertainty.

Average daily cash withdrawals in the first ten days of December are up by 7.1 percent on November figures, compared to a rise of around 5 percent in the previous four years, data from cash machine network LINK shows.

More than 3.2 billion pounds of cash has been withdrawn from more than 64,000 LINK cash machines so far this December -- an increase of 140 million pounds on the same period in 2006.

Since Friday, cash withdrawals have been particularly high, the figures show, suggesting that last week's quarter-point cut in interest rates boosted consumer confidence and encouraged mortgage holders to spend more freely.

The value of cash withdrawn is generally an accurate indicator of retail spending, so the figures point to a good Christmas for retailers despite current economic uncertainty in the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," said Richard Snook, an economist at the Centre for Economics and Business Research.