Visa’s UK Consumer Spending Index, compiled by IHS Markit, continued to signal relatively subdued expenditure trends in February, with overall spending falling by -1.8% on the year. Expenditure has now fallen in each of the past five months, with the latest reduction the quickest seen since last April.
Data split by channel indicated that the decline was broad-based across both Face-to-Face and eCommerce channels. Notably, this marked the second month in a row that spending has fallen simultaneously in both categories. Expenditure through Face-to-Face channels continued to decline at a quicker pace than that seen for eCommerce categories, with falls of -2.5% and -1.1% respectively.
Adolfo Laurenti, European Principal Economist, Visa, commented:
“Consumer spending slipped further in February, declining -1.8% year-on-year amidst ongoing uncertainty about the economic outlook. The weakness was relatively broad-based, affecting both Face-to-Face and eCommerce spending.
“Several categories suffered setbacks, in particular Transport and Communication, Clothing and Footwear, and Recreation and Culture. On a brighter note, Hotels, Restaurants & Bars bucked the trend (+3.2% year-on-year),this category has risen continuously since early-2011.”
Annabel Fiddes, Principal Economist at IHS Markit, said:
“The Visa CSI data point to a further modest reduction in household spending midway through the first quarter of 2019, as heightened uncertainty is taking its toll on consumer confidence and expenditure.
“Worryingly, spending fell at quicker rates on both the high street and online. Furthermore, the vast majority of spending categories noted lower expenditure in February.
“Taken alongside other timely economic indicators, such as the PMI surveys, the data suggest that the performance of the UK economy is likely to be relatively weak in the first quarter, as the adverse impact of Brexit-related uncertainty is compounded by signs of a wider global economic slowdown. “
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