Consumer spending in the UK continues to rise, but at the slowest pace seen for over three years.
The latest figures released by payment card company Visa has shown that consumer spending increased by just 0.9 per cent in the first quarter of 2017, compared to 2.7 per cent in the last 3 months of 2016.
Indeed, March actually showed a drop of 0.7 per cent month-to-month from February where spending had been fairly flat anyway.
The quarterly figure represents the slowest increase since 2013 and indicates that rising inflation is having an effect on spending habits in the UK.
UK and Ireland managing director at Visa, Kevin Jenkins, commented: ‘Our data suggests that consumer spending is beginning to slow from the strong levels seen in late 2016, as rising prices increasingly squeeze household purchasing power.’
The figures seem to back up recent research from pension provider Scottish Friendly and the Social Market Foundation think tank, which showed that 46 per cent of UK households were planning to reduce spending in the near future, with the majority blaming the rising cost of living.
These latest figures from Visa are based on spending on its credit and debit cards, which is then adjusted to ignore other payments that do not count as consumer spending.
The Bank of England has predicted the slowdown in consumer spending, and have indicated that they will be watching the situation closely to check if it follows their expectations with the UK/EU Brexit talks due to begin.
In a boost for the country, the Office for National Statistics this week confirmed that UK inflation held steady in March at 2.3 per cent, causing the FTSE100 and pound to rally on Tuesday when the figures were released.