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UK Consumer Spending Index November 2019: Consumer spending falls modestly during November
Visa’s UK Consumer Spending Index, compiled by IHS Markit, showed that expenditure fell by -2.0% on an annual basis in November, slightly quicker than the -1.1% decline seen in October.
On this measure, household spending has now fallen in each of the past 14 months. On a monthly basis, expenditure rose by +1.5%, likely helped by the Black Friday sales that took place at the end of the month, while the three-month-on-three-month measure posted a +0.8% increase.
Compared to last year, spending fell through both the Face-to-Face (-2.0%) and eCommerce (-2.6%) channels, with the latter posting the steepest fall since mid-2012. However, the later timing of the Black Friday weekend, which extended in to December, likely weighed on overall performance in November.
Adolfo Laurenti, European Principal Economist, Visa, commented:
“Visa’s latest UK Consumer Spending Index shows some encouraging signs of improvement. On a seasonally adjusted basis, spending rose by +1.5% in the month, and by +0.8% on the quarterly measure. Meanwhile, overall consumption slipped -2.0% year-on-year on the back of weakness in both face-to-face and ecommerce channels. At the category level, seven of the eight broad spending categories registered year-on-year declines in spend – with the exception of Hotels & Restaurants that outperformed other categories (+3.9% year-on-year)."
“While softer spending has been a trend through the summer and autumn, the two consecutive upticks in expenditure on the quarterly measure suggests that there is some momentum going into the final weeks of the year, and the favourable macroeconomic conditions that we noted in the past (rising wages and income, low unemployment rates) are beginning to translate into a more confident consumer. This is consistent with some more positive attitudes emerging from consumer confidence surveys, which show a reversal of the negative trends for selected demographic and regional segments.”
Annabel Fiddes, Principal Economist at IHS Markit, said:
“The latest Visa CSI numbers painted a disappointing picture for November, with expenditure dropping further and across both Face-to-Face and eCommerce channels. The timing of Black Friday sales, which occured later this year compared to 2018, has likely dampened any spending figures for this November as the event stretched into December. Nonetheless, the relatively weak health of the economy, as highlighted by recent GDP figures and PMI data, adds to the downbeat assessment of current conditions as the UK grapples with uncertainty around Brexit as well as a general election. Subdued economic growth and expenditure trends are therefore likely to persist unless there is greater clarity around the outlook and a rebound in confidence.”
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