According to a recent newspaper article, there have recently been two surveys from Markit and Deloitte which confirm official figures to confirm our recession is coming to an end.
The surveys found that although family finances in October deteriorated, the scale of this squeeze was the least for nearly two years. Deloitte claim that consumer optimism is the best since the third quarter of 2011 and pointed to a “likely upturn in consumer activity.”
As consumer spending underpins nearly two-thirds of economic output in the UK this is good news indeed. Spending has been very low since 2010 due to unemployment and sub-inflation pay deals, as well as the dark shadow of household debt.
Concerns about the levels of disposable income have eased in the past year and households are now more comfortable with their levels of debt.
Or have they simply become used to it or resigned to it?
The survey results are treated with caution by both Markit and Deloitte. Rising energy bills and worry about the economy are undermining some confidence and causing some to be pessimistic about the longer-term outlook.
Markit found that there had been “an abrupt end to the improving outlook reported throughout the summer” in October, as families predicted that conditions will worsen again.
Tim Moore, senior economist at Markit, said: “Households indicated sharp downward revisions to their financial outlook in October, bringing a rather abrupt end to the improvements seen throughout the summer. While pressures on current finances were reported to have moderated again, helped by stabilising incomes and lower debt, the steep reversal in future sentiment is a clear signal that households are likely to keep a tight rein on spending in the months ahead.”
Deloitte’s Mr Stewart added that the “brighter outlook is tempered with caution as there is no evidence yet of a significant loosening of the purse strings”.
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