The official measure of retail sales painted a rather more upbeat picture of high street spending in the early run-up to Christmas than the anecdotal evidence. The true picture probably lies somewhere inbetween. But crucially, households’ finances are in better shape this Christmas than they have been for almost a decade. Accordingly, consumer spending should be quite robust over the festive period as a whole – albeit partly due to intense discounting by retailers. Looking further ahead, the boost to households’ real incomes from low inflation and interest rates is likely to fade a bit next year, while fiscal austerity will be an increasing drag. However, real incomes should still rise by a reasonable 2% or so, and so we do not anticipate too sharp a slowdown in consumer spending growth.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services