The majority of Brits will be cutting back on everything from major items like holidays and cars, to less costly treats like cinema trips, our poll for the Sunday Times Magazine has found. Predictably, household groceries were the only area of expenditure that a significant number of people thought would remain unaffected in the next two or three years.
- 80% say they are very or fairly likely to delay spending on major items such as a new car
- Only 5% predict this kind of substantial spending would stay the same
- 74% think they are likely to spend less on leisure activities such as going out to restaurants or the cinema
- Whereas 12% think it unlikely that they will curtail this type of spending
However, many people felt that spending on items such as everyday food would remain the same.
- 56% agree they will spend less on everyday groceries
- Compared to a substantial 40% who anticipate spending a similar amount
Notwithstanding, a significant proportion of the population are concerned about how Government spending cuts and an uncertain jobs market will affect them and those closest to them.
- 76% are worried about spending cuts on public services having a negative impact on themselves or their immediate family
- 18% do not share this trepidation
- 64% are very or somewhat concerned about becoming unemployed or having trouble finding work
- While 28% don’t envisage similar problems
A probable decline in consumer spending should come as no surprise after the recent rise in inflation and VAT hike coupled with low pay increases or pay freezes for many. Inflation soared from 3.3% in November to 3.7% in December of last year, the biggest month-on-month increase on record, with mainly transport, food and household fuel bills responsible for the leap. This month, consumers were also hit by a rise in VAT from 17.5% to 20%.