Consumer spending fell again in September but hotels got a boost from the weak pound

Alys Key
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Spending fell across five of the eight sectors (Source: Getty)

Household spending declined again in September, throwing cold water on hopes of a recovery after a slight uptick in August.

Overall household expenditure dropped 0.3 per cent on the year, according to the latest Visa consumer spending index. This marked the fourth month in the last five to see a decline.

“Despite a slight uptick in UK consumer spending in August, the story of the past few months has been one of wariness in household spending,” said Kevin Jenkins, UK and Ireland managing director at Visa.

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Annabel Fiddes, principal economist at IHS Markit, explained: “Rising living costs, muted wage growth, and ongoing uncertainties surrounding Brexit negotiations and the strength of the UK economy continue to act as drags on household spending.”

Growth of 2.8 per cent in online spending was not enough to make up for a 3.2 per cent decline in face-to-face expenditure.

Spending dropped in five out of eight sectors, with the worst hit being transport and communication, where expenditure dropped 6.4 per cent.

Expenditure on household goods was down 2.6 per cent, while clothing, health, and recreation all fell by at least one per cent each.

But there was good news for Britain’s hospitality industry, which received a boost from increased numbers of tourists visiting the UK to take advantage of a weaker pound.

Read more: World Tourism Day 2017: Travel industry backs London

Spending at hotels, bars and restaurants was up 3.5 per cent, bettering last year’s growth rate of 2.6 per cent.

The news comes on the same day figures reveal that the top 500 UK hotel companies increased turnover by £600m last year.

This marked an increase of five per cent to a total of £15bn, according to Ortus Secured Finance.

But Visa’s data shows that spending in recreation and culture declined at its fastest rate since 2013, indicating a slowdown in spending on experiences, an area which has previously been seen as resilient.

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