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Sharp drop in seasonal spending

Heavy discounting over Christmas failed to entice shoppers into splashing out as consumer spending fell in December both on a monthly and a yearly basis, figures from Visa show.

Spending on food, beverages and tobacco saw a sharp year-on-year fall of 5.3%, while spending on transport and communication also saw an annual decrease of 5.8%.

Overall spending fell by 1.1% month-on-month in December and by 0.8% when compared with the same period in 2010.

Those behind the survey said the monthly drop reflected recent volatility as consumers become very cautious amid an uncertain economic backdrop.

Mail and telephone order spending saw a 3% year-on-year decline, while face-to-face spending decreased by 1.4% and online spending saw a more modest annual decline of 0.4%.

This is the first time in two and a half years that a year-on-year decline has been recorded for all three of these methods.

Consumer spending has not recovered since a peak in 2007, those behind the survey said.

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