LONDON, April 10 British consumer spending
increased at the slowest annual pace in more than three years in
the first three months of 2017, in a further sign that one of
the economy's main engines is losing steam as Brexit
preparations begin, a survey showed on Monday.
Payment card company Visa said real-terms spending
increased 0.9 percent year-on-year in the three months to March,
the weakest calendar-quarter performance since late 2013 and
down from 2.7 percent in the last quarter of 2016.
In March alone, spending dropped 0.7 percent compared with
the previous month, after being flat in February.
The survey adds to a growing mass of indicators showing that
rising inflation - caused in part by the pound's post-Brexit
vote tumble - is crimping consumer spending, just as Prime
Minister Theresa May begins Britain's EU divorce talks.
"Our data suggests that consumer spending is beginning to
slow from the strong levels seen in late 2016, as rising prices
increasingly squeeze household purchasing power," said Kevin
Jenkins, UK and Ireland managing director at Visa.
Bank of England Governor Mark Carney, speaking at Thomson
Reuters' London office on Friday, said he would keep a close eye
on whether consumer demand weakens in line with the central
Last week pension provider Scottish Friendly and the Social
Market Foundation think tank said 46 percent of households plan
to cut back on spending. More than half of these households
blamed the rising cost of living.
The Office for National Statistics releases inflation data
for March on Tuesday. Economists polled by Reuters expect
consumer prices rose at a 2.3 percent annual pace, unchanged
from February's rate.
Visa's monthly figures are based on spending on its credit
and debit cards, which it says account for about a third of
consumer spending in Britain.
The figures are adjusted to strip out payments such as taxes
that do not count as consumer spending, and to take account of
the growing proportion of purchases made by card rather than
(Reporting by Andy Bruce, editing by David Milliken)