Consumer spending falls for the first time in almost four years as inflation looms

 
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Clothing and footwear had its worst month since 2012 (Source: Getty)

Clothing and transport were among the worst-performing sectors in May as consumer spending fell for the first time in nearly four years.

Consumer spending fell 0.8 per cent in May, compared with the same period last year according to Visa UK's consumer spending index.

Read more: Spending growth falls to 10-month low as inflation spikes

Face-to-face spending declined by 5.3 per cent, but ecommerce rebounded, jumping 6.9 per cent after dropping 0.3 per cent in April.

Spending on clothing and footwear dropped at the quickest rate since April 2012, with a decline of 5.2 per cent. Household goods similarly saw the quickest drop since March 2013, at 4.1 per cent

The worst performer was the transport and communications sector, where spending declined 7.1 per cent on the year.

Read more: Retail sales slide as consumers cut discretionary spending

Miscellaneous goods and services, however, which includes hairdressers and jewellery, saw a 7.1 per cent increase in spend. Hotels, restaurants and bars recorded a relatively modest increase in May of 3.3 per cent, compared to 9.1 per cent in April.

Annabel Fiddes, economist at IHS Markit, said: "The outlook for consumer spending continues to look relatively bleak, with households facing faster increases in living costs and muted wage growth. The squeeze on household finances is likely to get worse as the Bank of England forecasts faster increases in consumer prices in the coming months."

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