Table of Contents
Economic Indicators
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- What you need to know
- Bank of England forecasts an extreme, but short, recession
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- Figure 2: Annual GDP growth, 2007-22 (forecast)
- Unemployment is set to more than double during 2020…
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- Figure 3: Quarterly unemployment rate, 2007-22 (forecast)
- … with huge effects for consumer behaviour
- Retail sales collapsed in April
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- Figure 4: Annual change in the value of retail sales, including fuel, January 2007-April 2020
- Spending to be replaced by precautionary saving activity
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- Figure 5: Annual household savings ratio and household consumption, 2007-22 (forecast)
- Savers will take a hit from the base rate cuts…
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- Figure 6: Interest rates on consumer savings products, January 2011-April 2020
- … while borrowers are yet to feel real benefits
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- Figure 7: Interest rates on select unsecured lending products, January 2007-April 2020
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- Figure 8: Interest rates on select mortgage products, January 2007-April 2020
Impact of COVID-19 on Consumer Finances and Spending
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- What you need to know
- Consumers expect COVID-19 to cause significant economic harm…
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- Figure 9: Consumer views on the impact of COVID-19, 14-21 May 2020
- … but do not anticipate long-term repercussions for their careers
- Lifestyle concerns peaked as lockdown was imposed
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- Figure 10: Level of concern over the impact of COVID-19 on lifestyles, February-May 2020
- Furloughing has affected a quarter of households
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- Figure 11: Impact of COVID-19 on household finances, 14-21 May 2020
- Reduced expenses have curbed the worst of the financial impact so far
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- Figure 12: Changes in spending habits as a result of COVID-19, 14-21 May 2020
- A third are still experiencing product shortages
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- Figure 13: Impact of COVID-19 on shopping behaviours, 14-21 May 2020
- COVID-19 has accelerated some existing trends
Consumers’ Response to the EU Referendum Result
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- What you need to know
- COVID-19 has pushed Brexit sentiment to a record low
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- Figure 14: Level of concern over the impact of the EU referendum, July 2016-May 2020
- Brexit unemployment concerns have grown amid COVID-19 job losses
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- Figure 15: Consumer views on the impact of the EU referendum, May 2020
- Positivity is down but most still expect to be personally unaffected
Current Financial Situation
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- What you need to know
- COVID-19 is yet to meaningfully affect household well-being…
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- Figure 16: The financial well-being index, January 2015-May 2020
- … and the vast majority are still feeling upbeat about their finances
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- Figure 17: “How would you generally describe your financial situation at the moment?”, May 2020
- The crisis has laid bare the vulnerability of self-employed workers
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- Figure 18: Current financial well-being, by employment type, January 2020 vs May 2020
Changes in Financial Situation
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- What you need to know
- Sentiment about changes in household finances has fallen sharply
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- Figure 19: Changes in household finances, January 2015-May 2020
- A third feel worse off than a year ago
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- Figure 20: “How would you describe your finances compared to a year ago?”, May 2020
- Four in 10 are worse off than before COVID-19
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- Figure 21: Changes in financial situation since the start of the COVID-19 outbreak in the UK, 14-21 May 2020
- Lower earners have been hit hardest
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- Figure 22: Changes in financial situation since the start of the COVID-19 outbreak in the UK, by annual household income, 14-21 May 2020
Financial Confidence
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- What you need to know
- Confidence fell dramatically when lockdown was imposed
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- Figure 23: The financial confidence index, January 2015-May 2020
- Four fifths still expect to get by over the next year or so
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- Figure 24: “And how do you feel about your financial situation over the next year or so?”, May 2020
- A squeezed middle
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- Figure 25: Financial confidence for the year ahead, by age, May 2020
Planned Financial and Spending Activity
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- What you need to know
- Financial activity in the last three months was the slowest on record
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- Figure 26: The financial activity index, January 2015-May 2020
- Travel booking has collapsed, but consumers are keen to get going again
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- Figure 27: “Thinking about how you spend your money, which of the following have you done over the last three months? And which do you plan to do over the next three months?”, May 2020
- Savings are being prioritised over clearing debts…
- … and consumers have been trying to brighten their home environment
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