Despite overall expenditure falling by -1.2% last month (January), Visa’s latest UK Consumer Spending Index today (12 February) revealed another positive month for hotels, restaurants and bars – spending up +3.7% year-on-year.

Explaining “the first January drop since 2013,” Visa chief commercial officer, Mark Antipof, said: “Consumer spending entered the New Year on a downbeat note, falling for the eighth time in the past nine months, as Britons continued to cut back on spending.

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“It wasn’t all doom and gloom though. Britons tackled the January blues with evenings out and early holiday bookings, giving a boost to hotels, restaurants and bars.”

Of the eight categories monitored, only three started the year off with an increase in expenditure – health and education (+1.4%), miscellaneous goods and services (+6.1%) and hotels, restaurants and bars (+3.7). Food and drink retailers meanwhile saw spending fall by -1.8%, following on from the slight increase (+0.3%) in December.

Citing “weak consumer confidence, sustained squeeze on real earnings, declining purchasing powers, uncertainty around Brexit negotiations and signs of a slowing UK economy” all as factors, Visa said: “Following on from a generally poor performance over 2017 as a whole, UK household expenditure continued to decline on an annual basis at the start of 2018.

“The pace of reduction quickened slightly since December, with spending falling by +1.2% year-on-year in January. The latest drop marks the eighth time in the past nine months that expenditure has fallen.”

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Annabel Fiddes, principal economist at IHS Markit added: “Latest Visa UK CSI data signaled a disappointing start to the year, with consumer spending falling for the fifth month in a row on an annual basis.

“This suggests the weak expenditure trends in 2017 have carried through into 2018, as households continue to face rising living costs and lacklustre wage growth.