Consumer spending slowed in June

Consumer spending has slowed amid economic and political uncertainty, with June seeing only a 0.9 percent annual rate of growth in the UK, according to Visa's UK Consumer Spending Index.

The index, which was compiled by Markit on behalf of the financial company, is based on spending on Visa debit, credit, and prepaid cards, which together accounts for one-third of all spending in the country.

The report reveals that June rounds off the weakest quarterly growth in two years, with Visa stressing that the full impact of the referendum result has yet to be felt. It states that the 2016 second quarter ending June 30, had witnessed the weakest spending since the first quarter of 2014, with June growth being only slightly more than May’s 0.8 percent annual growth, which had then marked a 27-month low.

Visa notes that the majority of the broad spending categories saw expenditure increase during June, helped by growth across recreation and culture, as well as household goods, both up from May. However, it was broadly flat across clothing and footwear with just a 0.1 percent increase, in May the category had increased by 4.3 percent.

Growth in e-commerce spending offset a further decline in face-to-face expenditure in June. Spending rose by 4.6 percent on the year in e-commerce categories, up from May's recent low of 2.3 percent, while high street spending declined by 1.3 percent year-on-year.

Visa UK and Ireland managing director, Kevin Jenkins, said: "All eyes will be on consumer spending data as we assess the outcome of the referendum. With the result coming late in the month, this report doesn't give the full picture but there's a clear trend over recent months showing a slowdown in overall growth."