A new
report on consumer spending power in 2013 has indicated that income growth
remains weak as incomes struggle to keep pace with rising inflation levels.
The
Lloyds TSB Spending Power Report has revealed that consumers were no better
off for December 2012 than during the same period in 2011. The rising cost of
essential items as well as the effects of rising inflations levels has
countered a small growth in income of 2.9%.
Patrick
Foley, chief economist at Lloyds TSB, commented on the significance of the
report:
“The
latest Spending Power Report shows consumers remain under some pressure.
Essential spending growth has clearly been affected by the snow in January,
but the picture of weak discretionary spending power remains in place at the
start of 2013."
“Looking
ahead, inflation is likely to remain high and is expected to pick up in the
first half of the year, so what happens to income growth will dictate the
extent of the squeeze on households.”
Christmas
costs begin to add up
The
research also suggests that almost a third of people who actually compiled a
budget for Christmas spent more than they originally intended to.
This
could mean that the fall in spending power at the start of this year could be
exacerbated by Christmas purchases that consumers are still paying for.
Retailers
are likely to feel the effects of this latest squeeze on household finances,
with consumers increasingly likely to focus their finances on essential
purchases.
Insolvency
specialists
As a
result, high street stores that are already struggling may need to call in a
specialist business
restructuring advisor to help them deal with the financial
challenges ahead.
A
corporate insolvency specialist can assist business leaders, financial
directors and stakeholders to deliver sustainable solutions for their
business.
A
number of businesses may find themselves in a financially distressed
situation in 2013. Seeking advice at a sufficiently early stage make a
crucial difference in terms of how your company deals with the situation.
|
Friday 22 February 2013
Income growth stutters in the face of rising inflation
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