Visa’s UK Consumer Spending Index, compiled by IHS Markit, showed that overall expenditure continued to decline at the end of 2018. The -1.0% year-on-year reduction seen in December was the fastest seen since April, having accelerated from a -0.7% decline in November.
Looking over 2018 as a whole, expenditure has fallen in eight months of the year, underscoring a relatively weak overall picture of household spending. Lower expenditure was largely driven by a disappointing performance by the High Street, as Face-to-Face spending fell -1.6% on an annual basis in December.
Growth in eCommerce spend remained relatively subdued, with expenditure through this channel rising by just +0.5% year-on-year.
Adolfo Laurenti, European Principal Economist, Visa, commented:
“The further decline in UK consumer spending in December 2018 is a disappointment, but not a surprise. Notwithstanding a backdrop of low unemployment and rising wages, households remained very cautious at the end of the year – as they were for most of 2018. An acceleration in spending at hotels, restaurants and bars (+7.6% year-on-year) suggests that some categories of discretionary spending are holding up better than the market as a whole. And the modest pickup in ecommerce point to the resilience of digital channels of distribution, a favorable long-term trend that recent woes have not derailed.”