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Consumer spending in the United Kingdom this year is expected to be at its worst since 2013, according to recently released data.
The country’s consumer spending index slightly increased last August, following a downward trend from May to July. Despite this, data from payments firm Visa suggested that consumer expenditure this year is still projected to remain weak. The data showed consumers’ spending on goods such as luxury items and commodities. It also showed trends on consumer activities such as spending on experiences and services, face-to-face spending, and online business transactions.
According to the data, face-to-face spending saw a decline for two consecutive months starting July. Spending on services such as transport and communication also decreased. However, online transactions and e-commerce continued to be strong. The data showed that buying and selling online has increased by 6.5% in August.
Critics believe that a possible cause of the downward trend in consumer expenditure is the Brexit referendum. Last year’s Brexit led to the decrease in the value of the pound. In addition, wage rates this year have seen growth, but prices of commodities have also kept increasing. The political uncertainty that the referendum brought about also affected business investments and interest rates throughout the country.
As consumer spending continues to be weak among UK citizens, a co-founder of a Europe-based online shopping platform said that now is the best time for retailers to sell their products abroad. The decreasing value of pound means that more consumers overseas can now afford luxurious UK products. He added that taking advantage of the current situation may lead to a growth in United Kingdom’s e-commerce this year.