Consumer spending dropped in January on a year-to-year basis for the first time since 2013.
According to the latest data from Visa, whose debit and credit cards are used for a third of payments in the UK, British shoppers spent less last month than in January 2017.
It is felt that consumers stayed away from the traditional post-Christmas sales last month, perhaps warned off by an uncertain financial climate following the expense of the Christmas period.
Household spending fell by 1.2 per cent in January compared with the same month in 2017, with spending in shops down by 4 per cent, said the payment card giant.
Visa?s chief commercial officer, Mark Antipof, said: ‘Consumer spending entered the new year on a downbeat note, falling for the eighth time in the past nine months, as Britons continued to cut back on spending.’
Car sales fell in January, which had a considerable impact on the figures, but some other areas such as hotels and restaurants fared better. Hair and beauty salons, and beauty product sellers also had a good month.
It is thought that higher inflation and relatively slow wage growth up until now helped to create the circumstances for the fall in spending, as the British economy lagged behind stronger growth in other rich nations during 2017.
The survey is produced for Visa by financial data company IHS Markit, and Annabel Fiddes, an economist at the company said that concerns about Brexit were weighing on consumer confidence.
However, she added that spending could pick up later this year as inflation is expected to fall back while wages rise more quickly. A sentiment shared by the Bank of England who announced last week that they were considering a further rise in interest rates because of expected wage growth.
The data from Visa is based on card spending, adjusted for inflation, the number of cards in circulation and a long-term fall in the use of cash.