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UK Consumer Spending Drops

UK Consumer Spending DropsUK Consumer Spending Drops

UK consumers cut back on spending for a third month in July as house-price growth slowed sharply, dealing yet another blow to the economy, Bloomberg reported.The broad-based weakness is being blamed on a squeeze on pockets as inflation outpaces wage growth as well as concerns about the health of the economy. The latest figures leave both household expenditure and the property market at their weakest in more than four years. A report from IHS Markit and Visa showed that consumer spending dropped 0.8% year-on-year, with clothing, household goods, food and transport among the worst hit. Home-price increases weakened to an annual 2.1% in the past three months, its slowest since April 2013. The two downbeat reports come days after the Bank of England downgraded its economic outlook and Governor Mark Carney warned that Brexit uncertainty is weighing on business and households. BOE Deputy Governor Ben Broadbent said Friday that the “maximum rate of pain” for consumers will soon pass, though any improvement could be modest. The central bank also cut its forecast for wage growth last week.

 

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