Further uncertainty surrounding the general election results is expected to fuel further decrease in spending and sales.
Consumer spending in May has dropped for the first time in four years, with the uncertainty from last week’s general election predicted to discourage spending further.
Data from the credit card giant Visa has revealed a 0.8 per cent drop in spending throughout May, making it the first year-on-year fall since 2013.
Sales figures hav also dropped by 1.9 per cent month-on-month.
The Retail Gazette reports that bricks and mortar stores saw their biggest decline in sales for five years, but this was offset by continually strong online growth.
The figures have been detailed as the weakened pound begins to catch up with shelf prices, following a period of minimal inflation.
According to reports, retailers are now struggling to absorb the rising import costs and are likely to be further affected by Theresa May’s failure to win a parliamentary majority which in the days following, has seen the value of the sterling drop further.
“Our index clearly shows that with rising prices and stalling wage growth, more of us are starting to feel the squeeze,” Visa managing director, Kevin Jenkins said.
Economist at HIS Markit, which compiled the data for Visa, Annabel Fiddes, added: “The outlook for consumer spending continues to look relatively bleak, with households facing faster increases in living costs and muted wage growth.”