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Uk Consumers Set To 'loosen Their Belts' This Year

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http://www.bbc.co.uk/news/business-22838241

UK consumers are set to "loosen their belts" this year, according to a leading economic forecaster.

In its latest report, Ernst & Young's Item Club predicts a recovery in consumer confidence.

Increases in personal tax allowances and a recovery in the housing market are expected to boost consumer spending.

Consumer spending is set to grow by 1.2% this year before rising to 1.9% in 2014, according to the report.

Is your belt loosening?

Clearly everyone is wanting to spendy spendy now!

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Is your belt loosening?

Clearly everyone is wanting to spendy spendy now!

What are people planning on spending all this excess, surplus to requirements money on......will it make them feel richer or happier? ;)

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It seems people are indeed spending again.

Lots of people who have thought for years that property was due a correction spooked by Osborne's latest into blowing their savings on the next artificial leg up. :angry:

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Most people seem to be having their belts loosened plenty enough with massive increases in the price of petrol, energy, food............... - and the list goes on.

Mind you if people do end up spending more this year on anything that'll likely be explained by price inflation - spending more but getting less.

In that case Ernst & Young's Item Club prediction of a1.2% "recovery" in spending is likely to be an underestimate.

Consumer confidence :lol: - they're having a laugh.

They'd better increase prices some more to help with the confidence trickery.

Edited by billybong

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.....inflation by stealth is paying the same for less.....you see it more and more nowadays....if it is not less space it is less in a packet, smaller content, diluted ingredients and reduced weight of products, less time.....all disappearing before your very eyes. ;)

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Its that meme again:

the UK is seeing a recovery.

you wont hear it from the people....just the meme spreaders.

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It seems people are indeed spending again.

Lots of people who have thought for years that property was due a correction spooked by Osborne's latest into blowing their savings on the next artificial leg up. :angry:

I saw on the front page of the Sunday Telegraph's Money supplement the main article about 1.5% mortgages to come and on the inside there was an article about investing in antiques. We have some uncanny similarities with the Weimar money collapse.

Mortgage rates to fall to 1.5pc for the first time

Competition from new lenders could see typical mortgage repayments reduced by £600 a year.

Mortgage rates could fall below 1.5pc when a rush of new lenders arrives on the market in the coming months.

The burst of extra competition could help push mortgage rates down by as much as a fifth of a percentage point – enough to cut typical repayments by £600 a year.

The new lenders are likely to be attracted into the market by the availability of cheap loans from the Bank of England, among other things – and they will be in a better position to pass on those low rates to borrowers than existing players, experts said.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10106793/Mortgage-rates-to-fall-to-1.5pc-for-the-first-time.html

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According to Knight Frank, Hong Kong property is up 28pc yoy, China 23pc, Dubai 21pc, US 10pc. etc.

We are now seeing the re-emergence of completely insane, QE driven house price bubbles all over the world. With the exception of Europe - hallelujah! - nowhere is safe.

Knight_Frank_house_2585718a.png

http://www.telegraph...-and-Spain.html

Edited by zugzwang

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Think by UK consumers they mean London consumers paying a few hundred a month on a huge tracker mortgage thanks to ZIRP. :angry:

Mind in the North I know plenty of people who have paid off their mortgages on a semi detached or terrace they bought £20-30k over two decades ago.

So if you are still in work and/or a boomer retiree things ain't too bad.

Not so good for the young though especially those who rent.

Edited by Secure Tenant

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Perhaps someone had better tell Ernst and Young about this.

The Trade Union Congress presents a different perspective

We know that since 2007 such growth quickly ground to a halt and then slammed into reverse course and the TUC have presented this in a different way.

On the eve of the recession in 2007 workers across the UK were earning a total of £690bn (in 2012 prices). However despite rises in employment, a combination of falling real wages, reduced hours and changes in the kind of jobs people are doing has reduced the UK’s total pay packet by 7.5 per cent over the last five years – a real terms annual cut of £52bn in 2012. The UK’s overall pay packet fell to £638bn last year.

I have mentioned the depressing effect on the UK economy of falling real wages and we see that one way of putting this is that some £52 billion of likely demand in the UK economy has vanished over the credit crunch period. Those who say or imply that inflation does not matter have a direct contradiction to their claims in that number as above target inflation has played a full part here. Also the advocates of policies such as Quantitative Easing have an itemised cost to the inflation that it contributed too. Remember these days they have been reduced to arguing that everything would have been worse without it (counterfactual) whereas here we see an example of how it has been worse with it! Along this road we see that easier monetary policy can lead to weaker economic growth should it have the effect of generating higher inflation and lower real wages which of course has been the UK experience

http://www.mindfulmoney.co.uk/wp/shaun-richards/what-has-been-the-impact-of-falling-real-wages-on-the-uk-economy/

With real incomes falling by so much I wonder how Ernst and Young came up with their numbers!

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When I loosen my belt my trousers fall down. Is this normal? :unsure:

Yes, when you have lost your trousers what else is there for you to lose? ;)

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  • 242 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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