E&Y finds consumer spending power in decline
UK households most cash strapped in five years
UK consumer
spending power continues to decline with the average UK household now having
less to spend on discretionary purchases as a proportion of their income in the
last five years,
Ernst
& Young’s Annual Discretionary Income Study has found.
The firm found that tax contributions, mortgage payments and monthly
household bills were continuing to take their toll, leaving the average family
with just over 22% of its gross income left over, as opposed to over 28% in
2003.
Tim Sleep, director of retail at Ernst & Young said: ‘Big rises in
household costs continue to outstrip wage inflation. Increasing mortgage
payments, driven by the four interest rate rises since last August, are having
the biggest impact on the consumer.’
‘But we’re also seeing above inflation rises on a host of fixed costs such as
council tax bills, water rates, pension contributions and petrol – the consumer
is being squeezed from many directions.’
Further reading:
Insider Business Club: the economy
Buy-in for greener buying
Grant Thornton: Retailing figures not ‘doom and gloom’