LONDON (Reuters) – British shoppers tightened their belts additional final month, figures from cost card company Visa confirmed on Monday, including to indicators that the economic system is struggling to get better from a weak first quarter.
Visa stated inflation-adjusted spending on its credit score and debit playing cards in April was 2 % decrease than final yr – the identical decline as in March and one of many steepest declines of the previous 5 years.
Looking on the three months to April, the autumn in spending gathered tempo, dropping by 1.6 % on a seasonally adjusted foundation in contrast with the earlier three months. In March, spending fell by 1.three % on an identical foundation.
“Low confidence levels amongst shoppers and the gloomy outlook for the UK economy are likely to have contributed to this continued caution,” Visa’s chief business officer, Mark Antipof, stated.
Discretionary spending on furnishings, electrical home equipment and recreation was worst hit, Visa stated.
Last week the Bank of England stated a first-quarter slowdown in financial progress to simply zero.1 % was most likely a blip attributable to unusually icy climate. But it did spotlight weaker shopper spending and a softer housing market as attainable warning indicators of extra persistent sluggishness.
Visa stated the weak shopper spending was stunning given inflation was starting to gradual and wage progress was edging up.
“Retailers will be pinning their hopes on further improvements in household finances and warmer weather leading to a more upbeat few months heading into summer,” Antipof stated.
Visa says its playing cards account for a 3rd of British spending. The information is adjusted for modifications in Visa’s market share, a long-term decline in money utilization, and to strip out transactions that don’t rely as shopper spending.
Reporting by David Milliken, modifying by Andy Bruce