Con­sumer spend­ing con­tin­ues to fall in the UK

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Ac­cord­ing to re­search made by pay­ments com­pany Visa, con­sumer spend­ing in the UK fell by 0.8% in July, mark­ing this the third con­sec­u­tive month of de­cline. This de­cline was even more in­tense than the one reg­is­tered in the pre­vi­ous month (in June this year UK spend­ing fell by 0.2%.). Ac­cord­ing to the same source, the steep­est re­duc­tion was seen in Trans­port & Com­mu­ni­ca­tion (-6.1% year-on-year), fol­lowed by Cloth­ing & Footwear cat­e­gories (-5.2%). More­over, the lat­ter saw the sec­ond fastest drop in spend­ing since April 2012 (af­ter May this year). Visa UK and Ire­land Man­ag­ing Di­rec­tor, Kevin Jenkins high­lighted the con­tin­ued pres­sure on house­hold’s in­come: “Con­sumer spend fell for the third month in a row in July, the first time over­all spend­ing had fallen for three con­sec­u­tive months since Fe­bru­ary 2013. The fig­ure pro­vides fur­ther ev­i­dence that ris­ing prices and stag­nant wage growth are squeez­ing con­sumers’ pock­ets. The drop in spend­ing was felt across a broader range of re­tail sec­tors last month, with cloth­ing, house­hold goods, food and trans­port among the worst hit. Ac­cord­ing to the same source ris­ing prices and stag­nant wage growth are im­pact­ing the UK con­sumers de­ci­sions. Re­duc­ing spend­ing also takes place in a time when the UK econ­omy is ex­pand­ing mod­estly, while un­cer­tain­ties in the in­ter­na­tional mar­kets con­tinue to be felt, and the un­sure out­come of the on­go­ing Brexit ne­go­ti­a­tions are weigh­ing down on con­sumer’s con­fi­dence.

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