Consumer spending fell for a third month running in July, highlighting how rising prices and a lack of pay rises are causing the public to tighten their purse strings.
The data from Visa reflects all consumer spending and not just that on cards, giving a better picture of how Britons are being more careful with their money.
It has four years since such a sustained drop has been seen in consumer spending, indicating how the pressure on consumers’ finances has intensified – and adding strength to the argument for the Bank of England holding the base rate at current historic lows.
“This was the first time overall spending had fallen for three consecutive months since February 2013,” daid Kevin Jenkins, UK & Ireland managing director at Visa. “The figure provides further evidence that rising prices and stagnant wage growth are squeezing consumers’ pockets.”
Visa – which produced the data with IHS Markit – said July’s spending was 0.8pc below the level seen the same month a year ago, accelerating from the 0.2pc drop in June, and only slightly below May’s 0.9pc fall.