Stat of the day: 9 years

The length of time it'll take before consumer spending is back to its original level, according to an Item Club report.

by Elizabeth Anderson
Last Updated: 09 Oct 2013
It hasn’t been an easy few months for retailers, who have been beset by the twin challenges of weak consumer confidence and higher commodities prices. But if they were trying to be optimistic, the Ernst & Young Item club has done away with that: according to a report, not only is it not going to get much better anytime soon, but consumer spending could be down for the next decade. Ouch.

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.

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