Consumer spending continues to shrink
(ShareCast News) - UK consumer spending continues to decline, with new research recording the third monthly falls in a row as a squeeze on household incomes mingles with economic and political anxiety.
Consumer spending dropped 0.8% in July compared to the same month last year, following declines in May and June, according to the Visa/Markit consumer spending index.
Transport and communication saw the worst spending slide of 6.1% for a second month, with clothing and footwear's 5.2% decrease following a better month in June, and household goods continuing to endure lean times with a 4.0% fall.
Brighter spots were seen in the hotels, restaurants and bars sector, which saw a 6% increase in spending during the key summer month, with researchers suggesting there was a benefit from an early surge in summer staycations due to the weak pound.
The survey found face-to-face expenditure fell 3.7% year on the year, while e-commerce spend increased 3.6%.
"Consumer spend fell for the third month in a row in July, the first time overall spending had fallen for three consecutive months since February 2013," said Kevin Jenkins, UK & Ireland managing director at Visa.
"The figure provides further evidence that rising prices and stagnant wage growth are squeezing consumers' pockets.
"The drop in spending was felt across a broader range of retail sectors last month, with clothing, household goods, food and transport among the worst hit."