Household spending falls for first time in four years, Visa finds

British households have cut back their spending for the first time in almost four years, as consumers come under pressure from rising inflation, stalling wage growth, and political and economic uncertainty.

The monthly consumer spending index from Visa, using its extensive data on credit and debit card transactions, found a drop in spending across a broad range of categories last month, including clothing, household goods, food and transport.

Household spending fell 0.8% in May compared to the same month last year, the fist monthly fall for the index since 2013.

Face-to-face spending in shops declined by a significant 5.3% - the sharpest fall in five years, while e-commerce expenditure rebounded 6.9% after a slight fall in April.

Clothing and footwear saw the biggest fall, of 5.2%, which backs up other retail research, while household goods saw a decline of 4.1%.

Kevin Jenkins, UK & Ireland Managing Director at Visa said the first fall in nearly four years in May followed marked softening in growth since the beginning of the year.

"Our Index clearly shows that with rising prices and stalling wage growth, more of us are starting to feel the squeeze," he said.

“Retailers of non-essential goods were among the worst hit, with clothing and household goods seeing sharp declines in sales. The experience sectors continued to record some growth, though at much softer rates, suggesting consumers were reining in their discretionary spending.

Visa was surprised by the fall for bricks-and-mortar retailers at a time when warmer weather and the May bank holidays would usually drive shoppers on to the high street.