The strength of the official measure of high street spending is hard to square with the weakness of consumer confidence, household income growth and the housing market. It may be that the official figures are revised in the coming months. Or it may be that consumers are making their cutbacks to non-retail spending – which ground to a halt in Q4. Alternatively, consumers might just be putting their heads in the sands. Is it possible that consumers keep spending this year by running down their saving to new record lows? Yes. Is it likely? Surely not. The recent equity price falls might well be the final straw for consumers.
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