After a seemingly strong spell around the turn of the year, the recovery in consumer spending is flagging again. Total real spending grew by just 0.1% in the first quarter, as a rise in retail sales was offset by a drop in spending off the high street. Even the rise in retail sales was partly driven by temporary factors such as good weather in March; sales have fallen since. The Queen’s Diamond Jubilee in June and the Olympics in August may provide some temporary support to certain types of spending. But the underlying picture looks weak, especially now that consumers are feeling the effects of the euro-zone crisis via rising borrowing rates and falling financial wealth.
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