UK consumer spending spikes up in Sept, but trend gloomy: Visa
LONDON (Reuters) – British consumer spending jumped in September, but not by enough to halt a year-on-year decline that reflects rising living costs, a survey by payments company Visa showed.
Consumer spending – adjusted for inflation and seasonal effects – rose by 1.4 percent in September after falling 0.4 percent month on month in August, Visa said, based on its credit and debit card data.
This was the biggest monthly rise since November, but still left overall spending in real terms 0.3 percent below its level a year ago.
Spending has fallen year-on-year for four of the past five months, the longest series of such declines since April 2013.
“Rising living costs, muted wage growth, and ongoing uncertainties surrounding Brexit negotiations and the strength of the UK economy continue to act as drags on household spending,” said Annabel Fiddes, an economist at financial data company IHS Markit, which compiled the data for Visa.
The upbeat tone in September month-on-month data echoed that in figures from the Confederation of British Industry, which reported the biggest annual increase in retail sales in two years in the early part of the month.
But Fiddes said overall expenditure remained on track for its weakest performance in four years.
The Bank of England is looking to see if consumer spending will recover from its weakness in the first half of the year as it prepares to raise interest rates for the first time in more than a decade.
Official data showed household spending rose 1.6 percent year-on-year in the three months to June.