Spring Budget does little to change consumer outlook

The measures announced in yesterday’s Spring Budget amounted to little and the big picture is still that fiscal austerity will weigh on households’ spending power over the next few years. Meanwhile, although retailers did not come away completely empty handed, the measures may do little to calm their fears about building cost pressures. Taken as a whole, the Budget measures were broadly neutral for households. The £1.6bn giveaway to households in 2017-18 was hardly transformative – representing just 0.1% of households’ nominal disposable income – and was offset by higher taxes in later years. Meanwhile, the big picture is still that the fiscal squeeze will hit income growth over the coming years. Indeed, there are plenty of measures coming in this year – including cuts to tax credits and benefits which will have far larger effects on consumers’ incomes than anything that was announced in the Spring Budget.