Data from Visa shows that inflation-adjusted consumer spending was -1.1% y/y in February
That follows a 1.2% y/y decline in January here. The data point in February marks the weakest start to the year since 2012, as signs continue to show that rising inflation and a lack of wage growth is weighing on household expenditure.
According to Annabel Fiddes, an economist at Markit - which compiled the data for Visa, "rising living costs, lacklustre wage growth and relatively subdued consumer confidence are all likely playing a part in the ongoing reduction in household spending".
Meanwhile, Visa's chief commercial officer, Mark Antipof, says that consumer spending is at risk of posting the worst Q1 results on record based on the latest reading.
As I've mentioned before, while Visa doesn't account for the entire base of consumer payments, they still track about 1/3 of it - which is a significant portion.
The consumer sector in the UK economy has been one of the major issues over the past year, and last week we even saw retailer John Lewis announce that profits were down by 22% (excluding one-off costs, which if not would've been a 77% drop).
To add further fuel to the fire, the company cut staff bonuses to the lowest in 64 years, to 5% of annual pay. Not exactly the kind of thing that will spur wage growth and improve the situation any time soon.
