12.02.201804:22:00UTC+00UK January Household Spending Fall First In 5 Years: Visa Survey

UK household spending declined at the start of the year, which was the first January drop since 2013, a survey compiled by IHS Markit on behalf of Visa, showed on Monday.

According to the Visa consumer spending index, overall expenditure decreased 1.2 percent year-on-year in January, following a 1 percent drop at the end of last year.

The latest reduction was the quickest seen since last October, and indicates that spending has now fallen in eight of the past nine months.

Data suggests the weak expenditure trends in 2017 have carried through into 2018, as households continue to face rising living costs and lacklustre wage growth, Annabel Fiddes, principal economist at IHS Markit, said.

Fiddes sees greater upward pressure on earnings growth going forward as labor market conditions remain tight.

Combined with forecasts of cooling inflationary pressures over the coming months, these factors could lead to a relative improvement in expenditure trends as the squeeze on pay-packets unwinds, although overall trends are likely to remain largely subdued in the current economic environment, Fiddes said.