Consumer spending has suffered its sharpest drop in six years, according to Visa’s latest consumer spending index.
Spending in-store fell by 5.4% in April when compared to the same period last year, while overall consumer spending fell by 2%, matching March’s year-on-year figures. Online spending was also down by 0.1%.
Household goods and recreation and culture were the worst performing sectors.
Mark Antipof, chief commercial officer at Visa, said: “With inflation beginning to fall and wages growing faster than expected in recent months, it would have been easy to assume we might be over the worst of the consumer squeeze. Yet there has been no corresponding improvement in spending, with April’s 2% decline a simple repeat of what we witnessed in March.
“Low confidence levels amongst shoppers and the gloomy outlook for the UK economy are likely to have contributed to this continued caution. It is clear that consumers remain in belt-tightening mode, with discretionary spending on furniture, electrical appliances and recreational activities worst hit.”
He added: “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.”