Consumer spending continued to plummet by 1% in December, although hotels were able to weather the trend: spending rose 7.6%.
This is evident from Visa's UK Consumer Spending Index, which showed that total spending declined 1% year-on-year in December, the sharpest decline since April.
However, hotels and restaurants outperformed other UK sectors in December, posting the highest growth rate in the last 20 months.
For the full year 2018, Visa's price dropped in eight months of the year, underscoring "a relatively weak overall picture of household expenditure". Lower spending was largely driven by a disappointing development in the main streets as face-to-face expenses fell -1.6% in December.
Visa also noted that online spending remained relatively low. Expenditure only increased by 0.5% over the previous year.
Visa European chief economist Adolfo Laurenti said: "The continued decline in UK consumer spending in December 2018 is a disappointment, but no surprise. Despite low unemployment and rising wages, households remained very cautious at the end of the year – as in most cases in 2018.
"An acceleration in spending in hotels, restaurants and bars (+ 7.6% yoy) indicates that some categories of discretionary spending perform better than the overall market. And the modest upswing in e-commerce suggests the resilience of digital distribution channels, a favorable long-term trend that has not been derailed by recent problems. "