Spending Power Report
20 February 2012
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- Consumers’ spending power remains under pressure from the twin impacts of weak income growth and rising spend on essentials.
- Almost one in five consumers say they have no discretionary income after essentials, whilst those who say money is tight also increased in January.
- Income continues to grow at a slow pace. In January annual income growth was 2.6%.
- Spending on essential items increased again in January, up 4.9% from a year earlier, influenced by rising spend on utilities.
- As a result, consumers’ discretionary spending power saw the weakest growth in a year, growing by 1.8% in January.
- This means that after inflation, spending power fell 0.9% year on year last month. This is the equivalent of £100 less to spend a year on non–essential items.
- A quarter of consumers say that they will reduce their spending in the future, and more plan to increase their savings or pay down their debt.