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Consumers and the Economic Outlook: Quarterly Update - UK - April 2015

Published By :

Mintel

Published Date : May 2015

Category :

Lifestyle

No. of Pages : 19 Pages

Economic improvements are finally beginning to be felt at the consumer level. Falling prices of essentials and rising wages are helping incomes go further and there are indications that people are beginning to relax their budgets and spend on items and experiences that have been out of reach during the years of austerity.

However, lessons learned mean that people are still cautious with savings safety nets still being important and concern about future prospects still being common. As this is likely being exacerbated by uncertainty related to the election it is plausible to expect caution to abate slightly once the results have been announced, but it will take time before consumers feel completely comfortable in their new found freedom.” 
Table of Content

Key Findings

Improvements at the household level leave consumers cautiously optimistic
The Capital continues to be predominantly responsible for consumer spend
Key economic indicators
Figure 1: Key economic indicators, March 2015

Current Financial Situation

Economic expectations provide focus for the election campaign
Figure 2: “How would you generally describe your financial situation at the moment?”, March 2015
Caution limits levels of improvement in consumer sentiment
Economic factors have different effects on different households and this affects average consumer sentiment
Figure 3: Financial wellbeing index, 2009-15
Lagging economic recovery in Wales dampens consumer wellbeing
Figure 4: “How would you generally describe your financial situation at the moment?”, by region, March 2015

Changes in Financial Wellbeing

26% feel they are better off than a year ago
Figure 5: “How would you describe your finances compared to a year ago?”, March 2015
Figure 6: The recovery index, 2011-15
The influence of house prices
Sentiment is rising more strongly in the Midlands
Figure 7: “How would you describe your finances compared to a year ago?”, March 2015

Financial Confidence

Majority of consumers are cautiously optimistic…
Figure 8: “And how do you feel about your financial situation over the next year or so?”, March 2015
as conditions improve but uncertainty prevails
Figure 9: Financial confidence index, 2009-15
London commuter effect boosts confidence of surrounding regions
Figure 10: “And how do you feel about your financial situation over the next year or so?”, by region, March 2015

Spending Plans

Easing of the income squeeze boosts spending….
Figure 11: “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?”, March 2015
but election concerns dampen future spending intentions
Figure 12: Spending index, 2012-15
Londoners most likely to continue spending in the run-up to the election
Figure 13: Spending plans, by region, March 2015

What It Means

Election related uncertainty delaying the return to confidence
Consumers relax in the presence of a safety net

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