Press release -
Consumer spending falls further in December
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.”
Annabel Fiddes, Principal Economist at IHS Markit, said:
“December’s CSI data show a disappointing end to 2018, with household spending failing to pick up in the run-up to Christmas. The sustained fall in expenditure throughout the fourth quarter of 2018 coincides with a marked drop in consumer confidence, as uncertainty around the UK’s impending exit from the EU continues to dampen sentiment.
“Alongside relatively weak UK PMI survey data, which signalled muted business activity in December, the spend figures add to evidence that the UK economy is likely to have slowed in the final quarter of 2018.”
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive.
Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second.
The company’s relentless focus on innovation is a catalyst for the rapid growth of connected commerce on any device.
As the world moves from analogue to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce.
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions.
IHS Markit is a registered trademark of IHS Markit Ltd. and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2019 IHS Markit Ltd. All rights reserved.