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Consumers’ spending power builds up in UK

Staff Writer |
Consumer confidence rose in early 2017, despite ongoing hikes in the cost of essential spending, according to the latest Lloyds Bank Spending Power Report.

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Lloyds Bank’s regular consumer survey – conducted in conjunction with Ipsos MORI – found that confidence in the country’s financial situation leapt by 5pp to 40% in January, while sentiment towards the UK housing market increased by 4pp to 46%.

There was also a rise in own job security, up 3pp since December to 79% in January.

However, optimism was tempered by a significant decrease in those believing that, in six months’ time, they will have more money left over after all household bills and essentials have been paid – falling 5pp from 24% to 19%.

Meanwhile Lloyds Bank’s analysis of its own current account data showed that the year-on-year increase in consumers’ essential spending for January was over 1%, the fifth consecutive month of expenditure rise.

However, the increase was lower than the almost 2% increase seen in December 2016.

Food and drink spending, which accounts for around 40% of essential spend, rose by over 1%, much lower than the rate of increase of around 3% seen in December.

However, it continues a trend of positive growth in groceries spend which started in May 2016. Spending on petrol and diesel continues to soar, at almost 10% year-on-year in January, the highest rate of growth since Spending Power records began in early 2013.

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