British shoppers spent less last month than the same month the year before, causing spending in January to fall for the first time since 2013, according to a survey that underscored many households’ caution about their finances and the approach of Brexit.
Visa, whose debit and credit cards are used for a third of payments in Britain, said on Monday that consumers stayed away from traditional post-Christmas sales last month.
Household spending fell by 1.2 per cent in January compared with the same month in 2017, with spending in shops down by 4 per cent, it said.
“Consumer spending entered the new year on a downbeat note, falling for the eighth time in the past nine months, as Britons continued to cut back on spending,” Visa’s chief commercial officer, Mark Antipof, said.
A fall in car sales weighed on the overall sales figures too. But there was better news for hotels and restaurants, as well as for hair salons and sellers of beauty products, as consumers looked for small treats for themselves.
Britain’s economy lagged behind stronger growth in other rich nations in 2017 as higher inflation since the Brexit vote and slow wage growth pinched consumers’ spending power.
Annabel Fiddes, an economist at financial data firm IHS Markit, which produces the survey for Visa, said concerns about Brexit were weighing on consumer confidence. But spending could pick up later this year as inflation is expected to fall back while wages rise more quickly, she said.
Visa’s data is based on card spending, adjusted for inflation, the number of cards in circulation and a long-term fall in the use of cash.