Consumer spending relying on less saving

While the latest Quarterly National Accounts raised further questions about the sustainability of consumer spending growth, we don’t think that a dramatic slowdown is in prospect. Household spending held up remarkably well towards the end of 2016, rising by solid quarterly 0.7% in Q4, unchanged from the ONS’ previous estimate and in line with the growth rate seen in the first half of 2016. The breakdown showed that the rise in spending in Q4 was broad-based, with strong spending both on the high street (for example, on clothing) as well as off it, with hotels and restaurants receiving a decent boost.