Britons’ Spending Power Stagnated in October on Consumer Squeeze
Britons’ discretionary spending power stagnated in October following two months of improvement as inflation eroded salary increases and consumers spent more on essential goods, according to Lloyds TSB.
U.K. consumers’ spending power for non-essential items after inflation was unchanged from a year earlier, after increasing 0.2 in September and 0.6 percent in August, the unit of Lloyds Banking Group Plc said in an e-mailed report released in London today. Spending on non-discretionary goods such as food and drink rose 3.2 percent last month from a year earlier.
Lloyds said consumers are yet to see cooling inflation translate into surplus money once essential spending has been taken into account. October’s data follow “a period of relatively weak income growth in real terms, whereby inflation has kept pace with the moderate increases in income,” it said.
In a separate report, the Confederation of British Industry said a quarterly index of confidence among consumer-services companies such as hotels and restaurants of their business situation jumped to 5 this month from minus 23 in August. A measure of sentiment among business and professional-services firms such as law firms and accountants jumped to 22 from minus 11. The CBI said the survey was conducted between Oct. 26 and Nov. 14.
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