UK consumer spending weakens with sharp slowdown in April

Bloomberg

UK consumer-spending growth slowed in April and is forecast to remain weak in the coming months, according to a report from Visa. Its index showed spending rose an annual 0.5 percent in April, down from 1 percent in March and marking one of the slowest rates of growth in the past three years. Weaker household demand is also taking a toll on retailers.
A separate report from the Institute for Chartered Accountants in England and Wales showed while there was a jump in business confidence this quarter, retailing was the laggard among nine sectors covered.
“The trend of relatively modest expenditure growth is likely to extend in to the coming months, as consumers are squeezed by both rising living costs and relatively lackluster wage growth,” said Annabel Fiddes, an economist at IHS Markit, which compiles the consumer index.
Inflation was at 2.3 percent last month and is forecast to keep accelerating through this year, outpacing wage increases and leaving workers facing a drop in real incomes. The Bank of England may raise its forecast for consumer-price growth this week, which could indicate an even bigger squeeze on households.
HOUSE PRICES
UK house prices recorded their first quarterly decline in more than four years, adding to signs that the property market is cooling.
In the three months to April, prices fell 0.2 percent compared with the previous three months, lender Halifax said in a report. In April alone, prices slipped 0.1 percent, meaning they haven’t risen for the past four months.
Almost every UK gauge is now pointing to a housing slowdown. Annual growth based on data from Nationwide Building Society is at the weakest in almost four years, while gains in asking prices for homes have also lost momentum. Mortgage approvals fell to a six-month low in March, according to the Bank of England.