Finance News

Consumer Spending On the Increase

We already heard about an increase in the number of loans, mortgages and other lending activity taking place thanks to the latest figures released by the Bank of England, but now consumers are showing where the extra cash is going as a survey by the Confederation of British Industry found that 47% of retailers have reported an increase in their sales figures for the first half of October.

It’s encouraging news for stores, shops and manufacturers who are reliant on the build up to Christmas to supply them with much of the year’s profits. The increase in sales this month is hoped to indicate a significant rise in spending as the big day gets closer.

Increased spending on the high street is also an indication that consumers are more confident in market stability and aren’t seeing such a pressing need to save for hard times. Spending hasn’t yet reached the levels that it enjoyed before the financial crisis, but it’s on the road to recover.

However, some people have also urged caution following the release of these figures, saying that people should not be too quick to spend when further economic woes could be just over the horizon. Increased energy bills, for one, could raise the cost of living, as could more problems in the Eurozone.

The head of economics with the CBI, Anna Leach, struck a balance between optimism and caution with her statement: “Falling inflation has somewhat eased pressures on family budgets, so that households are a little more willing to spend. There’s still a risk that ongoing uncertainty over the global economic outlook could dent consumer confidence, hitting prospects for the retail sector, while the scope for inflation to fall further is limited.”

At the very least, this means that October has been a good month for high streets and consumers. With a little luck, this will carry on through until Christmas, but after that is anyone’s guess.