UK population expenditures grow at the slowest pace in around 3 years, while families have to spare their money in view of moving up prices. Household expenditures minimized rise to 0.1% in the 3 months period to June, according to the Office for National Statistics.
It’s the lowest growth per quarter since the October-December period of 2014. At the same time no investment upping was observed in April-June. The individual consumption slacking was harder than City analysts anticipated, and it derives from faster inflation and slower wage growth which puts pressure on family economy.
UK’s vote in favour of Brexit brought down the pound and it’s having its effect too. EY Item Club’s chief economic adviser stated that consumer expenditures are going to be under pressure throughout the rest of the year by a continuing squeeze on buying power. There’s a high probability that real incomes rise will stay negative for the next several months, he added.
A certain degree of decline in household expenditures could be ascribed to people shifting their vehicle purchases to compensate for a tax change some time back this year, Capital Economics’ experts said. UK economist Paul Hollingworth pointed out that they’re hopeful of a slight growth boost through the remaining part of the year.