December spending "disappointing", says Visa Europe

Figures from the UK Expenditure Index, compiled by Markit, showed month-on-month spending on Visa cards was down 0.9% and the final quarter of the year was also down 0.9%.

Spending on the high street fell 2% in December year-on-year, while dropping 3.8% across mail and telephone orders and slipping 0.4% across online.

But Visa Europe said in the week before Christmas week-on-week spending grew 12% driven by the last weekend before Christmas. Online spending surged 12.5% in the same period as internet shopping becomes more popular.

Visa Europe commercial director Dr Steve Perry warned the 0.9% drop in spending across the final quarter could suggest a decline in household spending and contraction in the economy.

Markit chief economist Chris Williamson added: “Despite a surge in spending as shoppers sought online bargains in the week before Christmas, consumer spending remained disappointingly weak in December, down -1.7% on last year.

“With inflation continuing to outstrip pay growth, and worries persisting about job security and the economic outlook, consumer spending looks likely to remain under pressure for some time.”