Customer spending in the United Kingdom dropped for the third consecutive month in July as growing inflation, and stagnant wage growth pressed shoppers’ pockets, a new survey has shown. Spending fell at least 0.8% compared to a year earlier following a 0.2% drop in June, a statement from Visa and IHS Markit said.
Expenditure has now declined for three straight months – the biggest period of deterioration shown in over four years.
The figures were estimated by adjusting Visa credit and debit card activities for a variety of circumstances to create a measure of overall customer spending.
Five of the eight broad spending levels saw diminished spending volumes in July, with clothing and footwear suffering the highest falls.
Lower expense was also listed in household goods, food, drink, health, and education.
Increased spending was observed in the restaurant’s hotels, and bars category, while recreation and culture reverted to growth after sinking in June.
“Consumer spending fell for the third month in in July, the first time overall spending declined for three consecutive months since February 2013,” said Kevin Jenkins, UK and Ireland governing director at Visa.
The drop in spending was hit by a 3.7% shrinkage in face-to-face expenditure, which was partly offset by a 3.6% increase in online spending.
Markit professor Annabel Fiddes added: “Reduced spending comes at a time when the UK economy has been growing at a comparatively reasonable pace, while households have been meeting sharp increases in living costs, and a strike in profits growth.
“Alongside the renewed squeeze on household budgets, uncertainties linger over the direction of the economy and the outcome of the ongoing Brexit negotiations, which is weighing down consumer confidence.”