JP Morgan AM: The outlook for the UK consumer is on the up

JP Morgan AM: The outlook for the UK consumer is on the up

March 11, 2024

Outlook UK
Outlook vooruitzicht (21) recessie crisis

The last two years have been a very challenging period for UK consumers, as evidenced by consumer confidence reaching new all-time lows in the summer of 2022. Yet more recently, the combination of tight labour markets and sharp declines in headline inflation have seen wage growth outstrip inflation for six consecutive months.

With price pressures set to decline further as household energy bills decrease in April, we see another boost to purchasing power ahead. This, coupled with recently announced tax cuts and the planned increase in the National Living Wage in April, is all helping to offset the drag from higher interest rates. While this should be good news for growth, the Bank of England may view this situation differently given the potential implications of stronger spending on the inflation outlook.

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