Consumer spending growth at lowest level since 2016
Consumer spending grew 1.8% year-on-year in December, the lowest rate since March 2016, according to statistics compiled by Barclaycard.
With inflation at 2.3%, the figure equates to a contraction in real terms.
However, consumer spending through travel companies last month grew by 13% year-on-year and the number of air transactions was up 8.5%.
But Barclaycard warns caution among consumer spending looks set to continue as half of UK adults believe there will be a decline in the state of the UK economy in 2019.
Essential spending growth dipped to just 0.6% – the lowest figure recorded since July 2016 – caused by a contraction in supermarket spending of 1.1%.
Overall, non-essential expenditure rose by a modest 2%, boosted by strong growth in pubs and restaurants over the festive period.
Many people remain concerned about their spending power, with one in two consumers (49%) expecting to cut back in January to cover the cost of Christmas, while 48% say they feel less confident about their personal finances in the coming year than they have done for many years.
In terms of the wider picture, 50% of UK adults are concerned that there may be a decline in the UK economy – up from 43% last year.
Many shoppers are anticipating price increases over the next three months, particularly around the cost of fuel (65%), household utilities (66%) and groceries (72%).
However, over half of Brits (52%) said they wanted to support their local high street.
Barclaycard director Esme Harwood said: "Growth in consumer spending dropped to its lowest level since 2016 and represents a decline in real terms. Many Brits were more modest in their approach to Christmas spending compared to 2017, cutting back on the essentials to balance the costs of the festive season.
"Brits expect to cut back in January and remain cautious amidst ongoing economic uncertainty."
Lisa
Lisa joined Travel Weekly nearly 25 years ago as technology reporter and then sailed around the world for a couple of years as cruise correspondent, before becoming deputy editor. Now freelance, Lisa writes for various print and web publications, edits Corporate Traveller’s client magazine, Gateway, and works on the acclaimed Remembering Wildlife series of photography books, which raise awareness of nature’s most at-risk species and helps to fund their protection.
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