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Consumer spending continues to fall in July

Consumer spending in the UK fell by 0.8% in July, marking the third consecutive month of decline, with clothing and footwear sales hit particularly hard.

Year-on-year clothing and footwear sales fell 5.2%, according to research by payments company Visa.

The 0.8% drop in overall sales marks a greater fall than in June this year, when spending fell 0.2%. This overall drop in consumer spending marks the longest consecutive period of decline for four years.

Visa UK and Ireland managing director, Kevin Jenkins, noted that the continued decline demonstrated a sustained pressure on household budgets. “This was the first time overall spending had fallen for three consecutive months since February 2013,” he said. “The figure provides further evidence that rising prices and stagnant wage growth are squeezing consumers’ pockets.”

Annabel Fiddes, principal economist at IHS Markit, which compiles the data for Visa, said: “Reduced spending comes at a time when the UK economy has been expanding at a relatively modest pace, while households have been facing strong increases in living costs, and a slowdown in earnings 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.”

Readers' comments (1)

  • BREXIT is a red herring. If the consumer has money, they'll spend it, if things are tight, then they cannot spend as much. It's basic economics. The man on the street isn't going to spend less or more because of 'BREXIT negotiations', it's a ridiculous statement from VISA and a loaded agenda.

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