UK Consumer Spending In Second Month Rise

Written by Paul on Friday 19 December 2008

UK Consumer Spending Increases Again

A survey conducted by market research group GFK NOP has shown a rise for the second month in a row in UK consumer spending. This is a trend which bucks the current economic climate of job losses, a prolonged period in the rising cost of living and the beginnings of recession.

The BBC states that this may suggest success in Government and Bank of England fiscal policy, following VAT rate reductions from 17.5% to 15% and successive interest rate cuts to a low of 2% - but the broadcaster is hesitant to report a ‘real’ improvement.

Rachael Joy from GFK NOP confirmed this hesitancy by saying:

“The Consumer Confidence Index has improved again this month after the interest rate cut and the drop in petrol prices, but continues to hover at near record lows.”

“The crucial question is whether the improvement in this index will be translated into activity on the High Street during the January sales.”

Overall Record Low in UK Consumer Spending

It is the record lows in UK consumer spending that are perhaps most worrying when gauging the strength of the economy, suggesting that despite recent increases, many consumers are simply choosing not to spend with the same confidence. We may of course be seeing a seasonal glitch.

High Street Retailers Rally For Cash

The abundance of High Street sales before Christmas could be the best indicator of a failing economy. As companies desperately attempt to generate enough income to survive the traditionally quieter times in the first quarter of 2009, the question on most commentators lips seems to be when will the collapse of yet another well known High Street store occur, not if.

The ’surprise increase in retail sales’ therefore, as the BBC describes the official figures released yesterday, may not, unfortunately, tell the real story.

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