As party leaders compete for the UK’s confidence in the upcoming election, consumers’ overall confidence in the economy’s future could be damaged in the process.
With businesses critical about the impact parting with the EU could have on the economy, if the Conservatives or UKIP prevail; and taxpayers, who are concerned about Labour’s overall handling of the economy. No matter who succeeds in the upcoming 2015 elections, consumers are fearful about the election’s potential impact on their personal and household finances, affecting their ability to spend. Almost one in five Britons is planning to postpone major purchase decisions until the results of the election are known.
However, with the UK experiencing record low CPI inflation, salary rises and falling commodity prices, researchers claim that the economy has taken a recent healthy poll increase. Three quarters of consumers no longer worry about living within their means, and as a result are spending more on non-essential, more luxury commodities.
Chris Wood, Managing Director at Barclaycard, said “Despite some caution around the upcoming General Election, this looks set to continue – one in 10 people plan to treat themselves to a Smartwatch in 2015, and households are already planning more days out together as the summer approaches. This is an encouraging start to 2015 for consumers and retailers alike.”
The latest report from Barclaycard claims that consumer spending climbed 3.8%in the first quarter of 2015, compared with the same period last year. Brits are spending more on entertainment (11.9% rise), electronics (6.6% rise) and restaurants (17% rise) - as the majority feels more confident in relation to job security within the current economy.
The leisure and electronic sectors are both set to see significant uplifts in consumer spending. More than a quarter of the UK is planning days out to amusement parks, museums and aquariums in the coming months, and 24% plans to visit more restaurants during the coming quarter.
“Confidence in economic conditions is empowering consumers to begin to spend again on life’s little luxuries,” Wood comments. “As a result, in the first quarter of the year we see a significant uplift in consumer spending on dining out and electronic goods.”
Although the elections may be creating apprehension, Barclays Card found that 45% of Britons are now feeling positive about the UK’s economic outlook, up from 38% at the end of 2014. Polling company YouGov’s survey revealed that Brits are more increasingly confident that their financial situation will improve in 12 months’ time instead of deteriorating.
By Natalie Whitmore