Surge in windfall spending to become a trickle by autumn
Thursday 21 August 1997
Economists said a reduction in windfall spending in July to pounds 100m from June's pounds 200m showed the consumer boom was flagging as quickly as it blew up in the first half of the year.
They believe further cash may trickle into the shops through the autumn, but say the apparent need to jack up interest rates to dampen demand is now less urgent.
Clive Vaughan, at the retail consultant Verdict, said: "The surge that came through, particularly in June, does seem to be a bit calmer now. But we could still see some windfall spending filtering through until the beginning of next year."
The latest retail sales data showed growth up 0.3 per cent in July after a 0.8 per cent rise in May and a 1.2 per cent increase in May.
Analysts attributed the surge in retail sales in May and June to higher spending financed by windfall cash, which mostly went on large household items.
A survey of households conducted by consumer research group Mintel and investment bank Robert Fleming and published this week concluded that less than 25 per cent of the windfall cash had been, or would be, spent with nearly 77 per cent saved or used to repay debt. That would amount to pounds 8.2bn of extra spending power this year.
Peter Warburton, economic adviser at Robert Fleming Securities, said the latest figures chimed with his firm's survey, which was published earlier in the week: The surge in consumer confidence, which has occurred during the past six months as these windfall payments have been eagerly awaited, is likely to be reversed quite rapidly this autumn."
Mr Vaughan said there was little evidence the large payouts had permanently affected consumers' spending habits.
Wellcome Image Awards: The most striking images from the world of science, including breast cancer cells under chemical attack and a photographer’s own kidney stone
Missing Malaysia Airlines plane: Terrorism explanation 'cannot be ruled out', says CIA
Bob Crow death: 'Admired by his members, feared by employers' - Tributes pour in for RMT union leader and 'working class hero' Bob Crow
Oscar Pistorius murder trial: Athlete repeatedly sick as court hears 'graphic details' of Reeva Steenkamp's post-mortem
How climate change helped Genghis Khan: Scientists believe a sudden period of warmer weather allowed the Mongols to invade with such success
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Exclusive: Impact of immigrants on British workers ‘negligible’
Katie Hopkins continues campaign to become Britain's most hated talking head with poorly timed Bob Crow tweet
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
The quiet diplomat: Catherine Ashton - recognised and admired in all the world’s troubled countries, yet ridiculed at home
Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
- 1 Bad cattitude: Family call police after crazed and 'hostile cat with a history of violence' attacks baby before attempting to 'flee custody'
- 2 Family forced to flee home after discovering 'terrifying' nest of spiders in bananas
- 3 First Kiss: Filmmaker gets 20 strangers to make out on YouTube with awkward results
- 4 Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
- 5 Bob Crow death: 'Admired by his members, feared by employers' - Tributes pour in for RMT union leader and 'working class hero' Bob Crow
iJobs Money & Business
£1000 per month: Inspiring Interns: The company works with Tier 1 FTSE 100 Ban...
£35000 - £60000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...
£60000 - £80000 per annum + BONUS + BENEFITS: Harrington Starr: A top, City ba...
VOLUNTARY ONLY - EXPENSES REIMBURSED : Reach Volunteering: Fantastic opportuni...