Stock Market

U.K. Spending Remains In Stagnation in January

UK economy

British spenders have been spending less last month in comparison to last year. This has caused consumer spending to drop in January for the first time since 2013. This was according to a survey that accentuated many households’ caution about their finances and the approach of Brexit.

The debit and credit cards of Visa are used for a third of payments in Britain. The company said on Monday that consumers have avoided the traditional post-Christmas buying last month.

Household spending dropped 1.2 percent in January compared with the same month in 2017, with spending in shops down by 4 percent.

Mark Antipof, the chief commercial officer of Visa, stated that consumer spending entered the New Year on a downbeat note, falling for the eighth time in the past nine months, as Britons continued to cut back on spending.

A drop in car sales was heavy on the overall sales figures too. There was, however, better news for hotels and restaurants, as well as for hair salons and sellers of beauty products, as consumers are looking for small treats for themselves.

Britain’s economy slowed behind the stronger growth that other rich nations has shown in 2017 as higher inflation since the Brexit vote and slow wage growth has lessened the consumers’ spending power.

Annabel Fiddes, an economist at financial data firm IHS Markit which produces the survey for Visa, stated some of her concerns about Brexit were beginning to weigh heavy on consumer confidence. But spending could get back on track later this year as inflation is expected to fall back as wages rises more quickly, she added.

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