With CPI inflation set to reach just over 3% later this year and pay growth still subdued, the squeeze on real earnings growth should intensify as the year progresses. But the news that spending on the high street rebounded in April after the poor start to the year and that employment growth has continued apace, supports our view that spending growth will only slow gradually rather than collapse outright. As such, our forecast is for consumer spending growth of 2.0% in 2017 and 1.5% in 2018, down from 2.8% in 2016.
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:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services