Consumers and the Economic Outlook: Quarterly Update - UK - March 2017

Consumers and the Economic Outlook: Quarterly Update - UK - March 2017

Mar 2017 Mintel Wealth ManagementN/A Price :
$ 2479

Consumer sentiment has remained strong, reflecting growing real wages, low unemployment and, as yet, the absence of any major economic upheaval post-EU vote. When it comes to the impact of the vote, people are relatively positive about the big-picture issues such as the UK’s economic growth, and most feel that it won’t have any real impact on their household income or career prospects.

 Consumers’ biggest concern is around what it might mean for the cost of living, and with inflation starting to pick up there is a very real chance of a return to the post-recession income squeeze. There are already early signs of a shift in consumer behaviour in anticipation of price rises in early 2017, and if wage increases do start to lag behind price rises, then this will inevitably start to feed through into people’s spending decisions.”

Table of Content

KEY FINDINGS
No real signs of the “Brexit blues” for most consumers…
but there are warning signs ahead…
particularly among lower-income households
Prices remain by far the biggest Brexit-related concern
Key economic indicators
Figure 1: Key Economic Indicators, January 2017

CONSUMERS’ RESPONSE TO THE EU REFERENDUM RESULT
What you need to know:
The cost of living is the biggest concern…
and these worries are already affecting consumer behaviour
Figure 2: Consumer views on the impact of the EU Referendum on the UK economy, December 2016
People are more relaxed about what Brexit means for their own finances
Generational differences: the squeezed generation are particularly worried
Figure 3: Expected impact of the EU vote, by age, December 2016
Changes over time: the initial bounce has started to fade
Figure 4: Consumer views on the impact of the EU Referendum on the UK economy, July-December 2016

CURRENT FINANCIAL SITUATION
What you need to know:
A happy new year…
Figure 5: “How would you generally describe your financial situation at the moment?”, January 2017
Figure 6: The financial wellbeing index, February 2009 - January 2017
for retailers as well as for consumers
Figure 7: Non-seasonally adjusted retail sales (including fuel), 2014-2016
The stretched minority

CHANGES IN FINANCIAL WELLBEING
What you need to know
Finances continue to improve, but the rate of improvement is slowing
Figure 8: “How would you describe your finances compared to a year ago?”, January 2017
The impact of Sterling’s fall is still finding its way into the system
Figure 9: Changes in household finances, July 2011 – January 2017
Higher earners: full steam ahead…
reflecting post-vote concerns about a divided Britain
Figure 10: Average wage growth and consumer price inflation, 2007-2017

FINANCIAL CONFIDENCE
What you need to know
Confidence is still on a gradually rising trend
Figure 11: “And how do you feel about your financial situation over the next year or so?”, January 2017
Figure 12: The financial confidence index, January 2009 – January 2017
Optimism among Millennials and retirees
The less affluent already fear for their future

SPENDING PLANS
What you need to know
Both previous and planned spending have held up well
Figure 13: “Thinking about how you spend your money, which of the following have you done over the last three months? And which do you plan to do over the next three months?”, January 2017
Figure 14: The financial activity index, June 2012 – January 2017
Even big-ticket purchases are holding up well
Figure 15: Holiday booking intentions, June 2012 – January 2017
Confidence is reflected in spending plans

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