British shoppers tightened their spending over Christmas, leading to the first year-on-year fall in spending since 2012, and leading businesses aim to do the same over 2018, two major surveys showed.
Evidence of a consumer slowdown in Britain has mounted since official data showed the weakest household spending growth in five years earlier in 2017 against a backdrop of high inflation and worries about Brexit that weigh on business investment.
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Visa, whose debit and credit cards are used for a third of payments in Britain, said British consumer spending fell by 0.3 percent last year, after taking into account the effect of higher inflation, the first fall since 2012.
Spending in December alone was 1.0 percent lower than in 2016, also the first fall in five years, and reflected a squeeze on household incomes from the highest inflation in nearly six years, Visa said. Economists polled by Reuters expect growth this year will slow slightly to 1.3 percent, well below its longer-run average of just over 2 percent. Brexit remained at the top of the list of worries of more than 100 of Britain’s largest companies surveyed by accountants Deloitte, and the companies’ concerns intensified slightly.
The businesses also reported the biggest focus on cost control in eight years, despite a robust global economy. Deloitte’s chief economist, Ian Stewart, said: “In a world of accelerating growth and buoyant equity markets, domestic risks remain large. Reining in costs can help chief financial officers mitigate these.”
Risk appetite, a proxy for big companies’ willingness to invest, was a shade weaker than three months ago and well below pre-referendum levels. Deloitte surveyed 112 chief financial officers between Dec. 3 and Dec. 15. The CFOs’ companies represent about 20 percent of Britain’s publicly traded corporate sector by value.
In a related context, and among reasons that could indirectly affect Britons’ economic conditions, more than 500 companies including Ladbrokes, Easyjet and Virgin Money have revealed data highlighting gender pay gaps of more than 15 percent in favor of men for mean hourly pay. The gender pay gap refers to the difference between men and women in pay, regardless of their roles or jobs. This differs from pay parity, which means that companies must ensure that women and men with similar jobs receive the same remuneration for the work they do. In 2016, the gender wage gap was 9.4 percent for full-time workers and 18.1 percent for all workers.
Nearly half of UK workers will be affected by rules for reporting the difference in wages between men and women, which also reveal the difference in bonuses, and the results will be published in the government data list.
Companies with 250 or more workers must publish their figures by April and so far 527 firms have done so. According to BBC, Women's hourly pay rates are 52 percent lower than men's at Easyjet. On average, women earn 15 percent less per hour at Ladbrokes and 33 percent less at Virgin Money. All three firms say men and women are paid equally when in the same role.
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At Easyjet, for example, 6 percent of its UK pilots are women, a role which pays £92,400 a year on average, whereas 69 percent of lower-paid cabin crew are women, with an average annual salary of £24,800, BBC reported. The carrier said it had set a target that one in five of new entrant pilots should be female by 2020.
The Ladbrokes Coral group put its gender pay gap largely down to "weak representation at our senior levels" and Virgin Money said it was "confident" men and women were paid equally for the same jobs.
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