Household spending recorded its weakest annual growth in four years in the last three months after the recent heatwave failed to revive the high street's fortunes, an index has revealed.

Overall consumer spending fell by 0.3% year-on-year on average in the second quarter of 2017, the weakest quarterly growth since the third quarter of 2013.

Visa's UK Consumer Spending Index also showed signs that the 'experience economy' – which sees people paying to do something rather than buying a physical possession – is starting to be hit as consumers feel the pinch.

The report said the figures are further evidence that rising living costs and slow wage growth are squeezing people's disposable incomes, making them shift the focus of their shopping habits towards buying essentials rather than big ticket purchases such as furniture.

Face-to-face spending on the high street was down by 2.4% annually in June, marking the second month in a row where there has been a fall.

Online spending was up by annually 2.9% in June – a weaker increase than a 6.8% annual uplift recorded in May.

The index, compiled by Markit, uses spending on Visa cards as a base and adjusts the figures to take account of all spending, not just that on cards.

Kevin Jenkins, UK and Ireland managing director at Visa, said: 'Spend on food and drink grew by nearly 2%, while household goods suffered from a substantial drop as consumers cut back on big ticket furniture and home wares.

'The experience sector – which the index has shown consistently outperforming in recent years – has started to feel the impact, too. Spend on recreation and culture dropped for the first time in nearly four years.'

Annabel Fiddes, an economist at IHS Markit, said: 'The marked deterioration in household expenditure trends since last year comes at a time when households are facing an increasingly challenging scenario of rising living costs and weaker wage growth.

'Consumer confidence has also been dampened by uncertainties linked to the outcome of the ongoing Brexit negotiations, the inconclusive general election result, as well as relatively lacklustre growth across the UK economy.

'The downbeat data may add to calls for the Bank of England to keep interest rates lower for longer, as weaker consumer spending is likely to weigh on economic growth in the months ahead.'