Risks to consumer spending forecast tilted to the downside

April's money and credit data provide another reason to think that the consumer slowdown in April wasn't too severe. But it may take time for the cost of living squeeze to fully filter through into weakness in consumer spending. And the signs that inflation may rise a bit further and households may not cut their savings as far as we expect suggests the risks to our forecast for consumer spending to contract by 0.2% q/q and flatline in Q3 are tilted to the downside. We are sending this Weekly two days earlier than usual because Capital Economics’ London office is closed on 2^nd – 3^rd June for the Queen’s Platinum Jubilee celebrations.