UK consumer spending rose by just 0.5 percent year-on-year in April, the lowest rate since January and well below a historic average of 1.4 percent, according to a report by Visa.
Despite a 6 percent rise in food and drink sales and 9.2 percent year-on-year increase in spending in the hospitality sector, overall consumer spending was dragged down in April by high inflation and wage stagnation.
Kevin Jenkins, UK and Ireland managing director at Visa, said: “Consumer spending slowed down further in April, as consumers tightened their belts in the face of rising prices running up against stalling wage growth. Annual spending growth fell back to 0.5 per cent, from an already subdued rate of 1 per cent in March.”
“While overall figures suggest that clouds are gathering over British consumers, there were still some bright spots. Easter and the extended half-term break may have contributed towards a strong uplift of over 9 per cent in the hospitality sector.
“Meanwhile, Easter eggs and hot cross buns helped food and drink sales rise at their fastest rate in two years, up nearly 6 per cent. This seems to support the claim of some food and drink retailers that Easter is becoming ‘the new Christmas’,” Jenkins added.
First decline in e-commerce spending since 2013
There was a 0.1% annual drop in e-commerce last month, the first decline since September 2013. This drop comes after an 8.2% increase in e-commerce spending recorded in March.