Sunday, 26 September 2021

Spending on essentials sees biggest rise in 20 months

LONDON: Consumer gloom around inflation is deepening as essential spending saw its biggest rise in 20 months, according to a report. A rise in spending on food and drink has driven essential spending to its strongest level of growth since February 2014, the latest Lloyds Bank Spending Power Report said. Overall essential spending grew by 1% last month, the third consecutive month of positive growth. Lloyds Bank’s analysis of its own current account data also found that spending on groceries rose by 1.6% year-on-year – its highest rate of growth since March last year. Meanwhile, fuel expenditure rose by 5.9%, its biggest year-on-year increase since February 2013 as prices at the pump continued to climb. The figures are in contrast with a year ago, when spending on petrol and diesel dropped by 9.3%. Almost a third of people (31%) saw themselves having less money in 12 months, once all household bills and essentials have been paid, the bank’s survey found. Those who have a negative view of inflation has risen by 11% over the past 12 months to 49%, while the most common expectation for CPI inflation is that it will rise to 2% over the course of next year. Lloyds Bank managing director Robin Bulloch said: “2016 has been a year of sustained growth in consumer outgoings, with the steady rise in expenditure on food and fuel driving a significant increase in overall essential spending. “But while consumer confidence has remained resilient in the face of some seismic economic and political events, it seems the prospect of increased inflation is finally starting to weigh more heavily on people’s future expectations. “Concern around the impact this will have on customers’ spending power next year is now becoming evident.”

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