It is shaping up to be a pretty awful Christmas for retailers. Admittedly, the recent interest rate cuts and falls in petrol and food prices will provide some relief for household incomes. What’s more, the Chancellor is set to announce tax cuts for consumers in next week’s Pre-Budget Report. However, rising unemployment is still going to keep a lid on disposable income growth, while house prices are likely to fall further and credit will remain hard to get. Accordingly, we still think that spending will weaken further, dropping by some 2% in real terms next year. What’s more, we think that spending could keep falling in 2010 and even 2011.
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