Does it feel like this years Christmas shopping is a bit harder to cope with financially than last years? Well thats because it is, with most Brits having less money to spend on Christmas than last year.
Spending power among Brits dropped to it’s lowest level in November for this year, due to a combination of weak income growth and increases in the price of essentials, a Lloyds report has shown.
“This fall in real incomes more than likely reflects a deterioration in the labour market, with public sector job cuts and uncertainty over the wider economy affecting companies’ hiring plans,” said Patrick Foley, chief economist at Lloyds TSB.
“Although we are starting to see inflation falling back, the price rises of recent months, particularly in gas and electricity, are still feeding through to increased outgoings. Although we expect to see the squeeze from inflation abate in the New Year, the weak outlook for employment suggests consumers will continue to face difficult times for the next few months.”
Income growth slowed to around 1.9% in the year to November while money spent on essentials rose by 3.9%. What this means for the average Brit is that we have GBP20 less spending money each month.
The news comes despite findings that people in the UK are cutting back on essentials in order to save money.
Unsurprising, the study also found that we are resorting to desperate measures to get through the expensive Christmas period. While almost two fifths say they will be cutting back on gifts this year, a quarter say they will dip into their savings and a third say they will use credit cards to fund the festive season.
