LONDON (Reuters) - British consumer spending fell at its fastest annual rate in eight months in December, reflecting weaker economic confidence as the country moved nearer to its planned departure from the European Union, Visa payment card data showed on Wednesday.
A surge in spending at bars and restaurants was insufficient to stop overall consumer spending last month dropping 1.0 percent from its December 2017 level. This was the biggest fall since April 2018 and exceeded November’s 0.7 percent decline.
Robust consumer spending boosted Britain’s overall economic growth over the summer, helped by unusually warm weather and extra spending linked to the football World Cup.
But there have been widespread signs of a consumer slowdown since, removing support from the economy just as exporters face the knock-on effect from U.S.-China trade tensions and a softer world economy, on top of Brexit uncertainty.
“The sustained fall in expenditure throughout the fourth quarter of 2018 coincides with a marked drop in consumer confidence, as uncertainty around the UK’s impending exit from the EU continues to dampen sentiment,” said Annabel Fiddes, an economist at IHS Markit, which compiles the data for Visa.
British lawmakers voted by a margin of 230 late on Tuesday against the Brexit deal Prime Minister Theresa May had reached with Brussels, opening the door to outcomes ranging from leaving the EU on March 29 with no deal to reversing 2016’s referendum vote to leave.
Visa’s credit and debit card data, which is adjusted to take account of inflation and seasonal variations in spending, broadly tallies with unadjusted figures last week from payments company Barclaycard.
Both showed a big rise in spending at pubs and restaurants -- in Visa’s case, the joint-largest in 20 months, up 7.6 percent -- while online sales gained at the expense of the high street.
The British Retail Consortium has said its members suffered their worst Christmas since the financial crisis in 2008.
Reporting by David Milliken
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