Lloyds Bank

Spending Power Report

19 March 2012

  • Consumers’ spending power continued to be squeezed in February and after inflation fell 0.4% from a year earlier, the equivalent of around £451 less a year to spend on non-essential items.
  • At the same time, the number saying they are spending at least three quarters of their income on bills and essentials was higher in February, up 3% to 46%.
  • Spending on essentials is growing at its highest rate in almost two years.
  • The largest increases in spending have been on water (15.9%) and gas and electricity (10.5%).
  • Income growth remains extremely weak at just 3% in February. However, the impact of falling inflation is beginning to filter through as the fall in real term incomes was not as severe last month: after inflation, incomes fell 0.5% year-on-year in February, up from a 1.3% fall in January.
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