Mixed picture on consumer spending

Two separate surveys from Visa and MasterCard have delivered a mixed picture on the state of consumer spending in the UK.

Visa Europe's expenditure index says that consumer spending was "disappointingly weak" in December, declining 1.7% year-on-year and by 0.9% on the previous month, as sales on the High Street remained weak.

Household goods spending plummeted by 9.2% while spending on food and drink was down 2.2% according to the survey.

"With consumers playing an important role in fuelling the 0.9 percent GDP increase in the third quarter, the drop in fourth quarter spending raises the likelihood that the economy may have contracted again," said Chris Williamson, chief economist at Markit, which compiled the index for Visa.

A separate survey from MasterCard has indicated that retail sales rose in December. Excluding petrol, retail sales increased by 3.9% in December, compared to the year-ago month.

The credit and debit card issuer attributed the increase primarily to the late Christmas shopping by consumers that more than offset a slow start in December.

"Households left their Christmas shopping until the last minute and gave a late boost to retail sales on the High Street and online," said Shweta Chaudhury at MasterCard Spending Plus.