Consumer spending slows but hospitality continues to perform well

Consumer spending in May saw its slowest increase since February 2014 (0.8% on the year) according to Visa's Consumer Spending Index, but hospitality continued to perform well.

Economic and political uncertainty has driven the decrease in spending; but hotels, restaurants and bars registered a 6.7% annual increase in expenditure and a slight increase on April (6.6%).

Kevin Jenkins, UK & Ireland managing director of Visa Europe, said: "The two May bank holidays and the half-term break provided bright spots, with spending on going away, dining out and entertainment continuing to perform well."

Visa is also tracking the performance of small businesses across the UK each month. Josh Beer of the Illustrious Pub Company in Cambridgeshire said: "May was an average month for us, with revenue remaining fairly flat compared with last year. It's getting tougher to get customers through the door as we face more competition from high street food chains in our area.

"To address this we're installing TVs to allow sports fans to cheer England on from their local. We hope this will provide a boost to our sales in June, especially if the England team does well at Euro 2016."

Compiled by Markit, the index reflects overall consumer spending, not just that on cards.

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