Consumer spending in the UK went up during March 2011, according to new research by Nationwide.

The building society noted that this is the first time spending has increased since VAT was hiked to 20 per cent in January this year.

Nationwide speculated that this could be a sign that consumers are "adjusting to the impact this is having on their own finances".

As a result, manufacturers and retailers could potentially benefit from trying to attract customers with marketing strategies such as leaflet and booklet labels.

"Consumers assessed that March was a slightly better time to be buying household goods or to make a major purchase," said Robert Gardner, chief economist at Nationwide.

He added that while sentiment among the public did increase last month, consumer confidence remains at a record low and is not likely to improve significantly for some time.

This comes after the Office for National Statistics confirmed that annual inflation dropped to 4 per cent during March.

Denny Bros Ltd, 14 April 2011