UK households remain cautious on economic outlook, discretionary income and debt levels
UK households remain concerned about their economic outlook, disposable incomes and debt levels, survey data out today shows.
Deloitte’s consumer confidence index for the UK in the second three months to 30 June remained at a minus eight per cent – unchanged from the first quarter – but down four percentage points from the same time last year.
Despite resilient employment and earnings figures released last week by the Office for National Statistics, Brits are still feeling uneasy about their ability to cover costs.
Consumer sentiment towards household disposable income and levels of debt fell by five and four percentage points, respectively, year-on-year.
Deloitte suggested that the contrast was due to economic and political uncertainty and potential risks to UK GDP growth from trade wars and a messy divorce with the European Union.
Ian Stewart, chief economist at Deloitte, said: “Consumers’ finances are in good shape thanks to a long boom in jobs and strong wage growth. That said, uncertainties about Brexit and growth are weighing on consumer sentiment and their spending plans.”
Although many of the 3,000 respondents cited a lack of confidence in their disposable income levels, there was also a marginal increase in discretionary spending, up one percentage point (to net minus five per cent), though spending in essential categories has fallen by three percentage points to 10 per cent.
Ben Perkins, head of consumer research, said: “As we’ve headed into the summer months, consumers have started to spend more on clothing and footwear, updating their wardrobes for the new season, as well as making home improvements and some major household appliance purchases.
Perkins added: “While the end of this quarter saw an uplift in retail sales, a slowdown in both borrowing and saving points to growing caution which could impact spending in the coming months. The question remains how long consumers will be willing – or, indeed, able – to keep spending.”