And although Nationwide added that there are ‘small improvements’ in prospects for both household income and unemployment (or a lack thereof), Rober Gardner, its chief economist, pointed out that between them, those figures can ‘hardly be described as festive cheer’. Well, quite.
More encouragingly, Nationwide’s spending index (which measures spending, rather than how consumers feel about spending) rose by two points in November, and Nationwide said shoppers had been more enthusiastic about the idea of making household purchases. The same can’t be said of big purchases (houses, cars etc), though – twice as many consumers said now is a bad time to make a major purchase than those who said it’s a good time. Not surprising, considering those surveyed reckoned house prices will fall by 1.1% over the next six months.
Still: Gardner pointed out that the fact that inflation has dropped to 4.8% provides some indication things might be about to improve – although conditions are still tough. ‘Signs that inflation has passed its peak may have provided some comfort, but… in November, the cost of living was still rising at more than twice the pace of underlying wage growth. With unemployment also rising sharply… it’s not surprising that consumers’ assessment of their current situation remains close to all time lows.’
Thank goodness, then, for online shopping, which bucked trends throughout the last downturn and looks like it’s going to do the same this time round, too. As miserable high street retailers stare listlessly at their empty tills, figures by online payments provider PayPoint.net have suggested that online spending in the run-up to Christmas increased by nearly 15%. Apparently, the number of individual transactions it processed between December 1-18 also went up, by 11%. So for those retailers still lacking an online presence, perhaps a website might be a good new year’s resolution…