Economic growth continued to be supported by the strong performance of the services sector. In particular, consumer spending rose by 0.7 per cent in Q4 2016, compared with the previous quarter, maintaining the strong momentum built up throughout the year. However, a more detailed breakdown revealed real household disposable income fell 0.4 per cent in Q4 2016 on the previous quarter. On an annual basis, growth was flat meaning it was the weakest since the final quarter of 2013. Consequently, households were only able to fund the rise in spending by dipping into their savings. Accordingly, the household saving ratio dropped to the lowest since records began in 1963 at 3.3 per cent in Q4, from 5.3 per cent in Q3. While a large proportion of the fall would have been driven by the rise in inflation towards the end of 2016 – the impact of the deflator – it does raise concerns. Indeed, unsecured lending remained near a 10-year high in February (+10.5 per cent) and households remain heavily indebted. On the face of it, the final quarter of 2016 seems to be built on shaky foundations. With the outlook of rising inflation and weaker wage growth expected to materialise, the consumer sector will come under intense pressure.
UK Consumer Report
Our UK Consumer Report analyses a range of UK consumer spending indicators on a quarterly basis. Subscribers have access to all data (analytical reports and interactive data) which includes consumer spending, housing market data, consumer confidence, consumer credit, household inflation, labour market statistics, wage growth, retail sales and more.
UK Consumer - Q4 2016
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The UK Consumer report includes:
|Summary and economic overview|
|Consumer spending overview|
|Consumer spending by category|
|Consumer spending growth (year-on-year)|
|Consumer spending growth (quarter-on-quarter)|
|Average spend by household|
|Consumer spending by region|
|Consumer spending by income decile|
|Consumer spending forecasts by category|