Should we worry about a consumer boom?

The recent strong growth of unsecured household borrowing has prompted concerns that, far from snapping their wallets shut in response to Brexit worries, UK consumers have embarked on another credit-fuelled spending boom. But broader forms of borrowing are growing more slowly and the low level of interest rates means that debt-servicing costs are very manageable. And in any case, until there are more convincing signs of a rebalancing of the economy towards investment and exports, growth will continue to depend on consumers carrying on spending. Meanwhile, this week’s economic data is likely to reveal price pressures building and the labour market continuing to lose some of its shine. Finally, retail sales figures should show that consumer spending remained strong in the run up to Christmas.