December brought fresh headwinds for UK consumer spending, which contracted 1.7% year-over-year according to latest figures. This marks the steepest pullback since February 2021, signaling weakening demand across the retail landscape.

The slowdown reflects mounting pressures on household finances—persistent cost inflation, tightened credit conditions, and cautious consumer sentiment are all playing a role. When you stack this against broader economic uncertainty, it paints a picture of households pulling back on discretionary purchases.

For crypto and asset markets, this kind of macro deterioration typically reshapes investor behavior. Riskier assets often face headwinds when real-world spending contracts this sharply. The last time we saw a drop this severe was during the post-pandemic recovery phase, which followed a completely different economic backdrop.

What's worth watching: whether this slowdown accelerates or stabilizes in coming months. Economic cycles like these tend to influence capital flows across different asset classes, including digital assets.