The October UK Expenditure Index published today shows that consumer expenditure fell by 0.9 per cent month-on-month (September to October), whilst year-on-year consumer expenditure fell -1.9 per cent.
The report also shows that spending at hotels and restaurants rose compared to a year ago, but there were declines in five specific areas, including the food, beverages and tobacco sector.
October, the worst month for consumer spending since May, saw a marked difference between spending online and face-to-face. Whilst online spending continued to rise throughout October, albeit at the slowest rate for a year, face-to-face spending was down for a sixth successive month.
Using seasonally adjusted three-month-on-three-month figures, which provide the most reliable measure of underlying spending trends, consumer spending was flat (0.0 per cent) adding to evidence of a stall in the UK economy at the start of Q4.
There were also strong discrepancies by sector across the month, with clothing footwear, hotels restaurants and recreation culture the only three categories recording growth in spending up to October.
The steepest year-on-year reduction was recorded in the transport communication sector.
Commenting on the Index, Dr Steve Perry, commercial director at Visa Europe, said the economic outlook remained "uncertain".
Perry said: "The underlying trend in consumer spending over the last three months was flat but we are seeing significant month-on-month variations. The country remains sensitive to the economic environment, and small factors such as holidays and the weather are the difference between marginal increases and decreases in overall spending."
He continued: "October proved to be the worst month since May for consumer spending. As we approach the end of the year, the outlook remains uncertain and we will need to see in what mood consumers approach their Christmas shopping."
Chris Williamson, chief economist at Markit, which compiled the Index on behalf of Visa Europe, said the drop in consumer spending could likely be attributed to the warm weather.
He said: "Consumer spending fell slightly in October, which looks to have been one of the warmest on record. Indeed, the good weather encouraged higher spending on leisure activities such as restaurants, hotels, recreational and culture."
The October UK Expenditure Indexwas released on 8th November 2011.