U.K. consumer spending had its first January decline in five years last month, dealing another blow to the hopes of retailers after an inflation squeeze sapped demand in 2017.
According to an index by Visa, spending fell 1.2 percent from a year earlier after falling 1 percent in December. It’s the eighth decline in the last nine months.
The figures support the Bank of England’s caution about the outlook for domestic demand in 2018. In its latest forecasts, published last week, it was upbeat about the support from the global economy, but far less optimistic about consumers, given that inflation continues to outpace wage increases.
“Household consumption growth is expected to remain relatively subdued, reflecting weak real income growth,” the BOE said.