Consumer spending weakest for five years

The Christmas shopping month of December rounded off the worst year for consumer spending in the UK since 2012, according to an index.

Households’ spending fell by 1 per cent annually in December, following a 0.9 per cent annual decrease in November, Visa’s UK Consumer Spending Index found.

Last year marked the first annual decline in consumer spending in five years, down 0.3 per cent compared with 2016.

Those behind the report said that, while the high street Scottish businesses towards the bottom of the confidence index but perhaps not unsurprising given the backdrop of economic uncertainty and concern over weak domestic demand.

“While confidence has dropped marginally from July, it’s still broadly in line with the sentiment felt this time last year.

“Encouragingly, Scottish firms remain stoic with their investment and export plans. had suffered recently, online spending had held up. Online spending increased by 2 per cent annually in December, while face-to-face spending on the high street saw an annual fall of 2.7 per cent.

Annabel Fiddes, principal economist at IHS Markit, which compiled the report, said: “The sustained drop in expenditure comes at a time when household purchasing power is being continually eroded by rising living costs and relatively subdued growth in pay packets.

“Meanwhile, consumer confidence remains relatively muted amid uncertainties over the strength of the UK economy and the ongoing Brexit negotiations.”

“Ultimately, uncertainty is at the front of Scottish business’ minds and we will need to see a shift to return to a position of growth.

“As Brexit negotiations continue to the next phase, we will hopefully see greater clarity, which will help businesses to plan carefully and be flexible to see through the next six months and beyond.”