Brits prepare to spend post lockdown

Lockdown-weary consumers in the UK plan to splash the cash in a £50 billion post-pandemic spending spree once the economy fully reopens, a new report suggests.

Researchers found consumers are ready to treat themselves to make up for lost time and will use the cash that, for many, has built up over the last year of suppressed economic activity. 

• Around 25% of the £192 billion of lockdown savings accumulated in the past year is likely to be spent, says the survey by investment organization Scottish Friendly and the Centre for Economics and Business Research (CEBR). 
• Travel and holidays, both at home and abroad, will be a priority for people, as well as once again eating out in restaurants and cafes.
• Meanwhile, the Bank of England recently said it expected a more measured approach from cautious consumers, estimating they would splash out only 5% of savings accumulated. A bigger spending spree could well lead to a sharp spike in inflation.

What it means

“This will provide a welcome boost for many businesses, but it could lead to a sharp spike in prices during the remainder of 2021, which risks hurting many savers. If interest rates are kept low, there is a real threat that inflation could rise rapidly above the Bank of England’s 2% target and be difficult to control.” Kevin Brown, Scottish Friendly savings specialist

Sourced from Scottish Friendly and the Centre for Economics and Business Research (CEBR)