The outlook remains bright for further strong growth in consumer spending over the coming quarters. Although the jobs recovery has slowed, the economy has retained a healthy degree of momentum, suggesting that productivity is finally on the rise. This bodes well for a pick-up in wages over the coming months. In addition, with cost pressures remaining markedly subdued, consumer price inflation looks set to continue to ease, perhaps to below 1% by the end of the year. This, in turn, should provide a much-needed boost to consumers’ real earnings, and therefore offer a more robust foundation for continued strong growth in spending.
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