UK consumer spending picks up in July, bucking signs of slowdown: Visa

[LONDON] British consumer spending picked up last month, according to a survey from card company Visa UK that bucked other signs Britons have become more cautious since June, when they voted to leave the European Union.

Based on Visa credit and debit card usage data, consumer spending rose 1.6 per cent in July compared with a year ago, up from June's 0.9 per cent increase and the biggest rise in three months.

Seasonally-adjusted spending increased by 1.1 per cent, the strongest month-on-month gain since January, reversing a 0.5 per cent decline in June.

But the monthly data are volatile. Taken together, the last three months suggested consumers remain careful with their spending, Visa said.

"July's data suggests that UK consumer spending is holding up despite the ongoing uncertainty following the referendum, albeit at lower levels of growth than we've seen in the last couple of years," said Kevin Jenkins, Visa's managing director for Britain and Ireland.

Other research suggests consumer spending, a pillar of Britain's economy, has flagged since the Brexit vote.

Consumer confidence suffered its sharpest drop since March 1990 last month, according to a closely-watched gauge from market research company GfK.

Meanwhile British retailers reported the sharpest fall-off in sales in four years, though few major retailers have individually pointed to a big impact from June's referendum result.

Last week the Bank of England slashed its forecasts for household consumption, predicting growth would slow from 2.5 per cent this year to just one per cent in 2017 and 0.75 per cent in 2018 as unemployment rises.

It cut British interest rates to a record low 0.25 per cent and launched stimulus measures that could be worth up to 170 billion pounds (S$299 billion).

REUTERS