The economic forecasting group says Britons’ spending will stay below pre-recession highs until at least 2013, while growth will remain squeezed until 2020. Depressed wages and rising inflation will be the biggest factors in people’s reluctance to splash the cash.
Although the group says consumers will start enjoying the economic recovery from 2013, the recession will leave a big impact on their spending habits. Shoppers will remain cautious, choosing to keep a tight grip on their purse strings, and focus on paying back debt. As UK consumer spending makes up a significant proportion of GDP, it’s not good news for retailers who are dependent on consumer spending.