THE bank card consumer confidence rose slightly in July on purchases of non necessities, but optimism was held back due to high inflation.

The index inched up 0.05 from June to 86.11 points in July, due to higher spending on restaurants, air tickets, jewelry and cars. However, the index dropped 0.3 lower from a year ago. It was the third straight monthly decline on a yearly basis.

Average spending on single transactions of gold jewelry rose from a month earlier due to higher gold prices. The increase directly contributed to the index's rise.

Chinese consider gold jewelry as a safe investment during periods of high inflation and rocky stock markets. More gold jewelry purchases reflect concerns over economic uncertainties.

A higher reading of the index signals that more bank cards are being used to pay for non-necessities such as luxury goods and travel. The index tracks the expenses of 200,000 individual card users in affluent cities who use the cards to pay for 90 percent of their purchases.

China's consumer price index, the main gauge of inflation, rose 6.5 percent in July to hit a 37-month high. Data showed that pork prices jumped nearly 57 percent in July from a year ago.

Gold bullion price touched a record high US$1,782.50 on Tuesday in New York.

Source:shanghaidaily