No ease in consumer squeeze – Lloyds

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consumersqueeze

consumersqueezeYour family has more than likely noticed the big squeeze on spending power over the last year or so, with almost all of us feeling the pinch - according to new research.

With people being more careful with their money, it should come as no surprise that spending deteriorated even further in March, hitting its lowest level since February 2011.

According to the Lloyds TSB Spending Power Report, escalating bills for fuel, gas, electricity and food has lowered spending on non-essential items, meaning most of us are around £113 worse off this year.

The biggest rise last month was in fuel costs, as the threat of a petrol strike saw millions rush to the pumps, resulting in a 12% rise on fuel expenditure in March compared with February.

Mix that with income growth remaining lower than inflation and Patrick Foley, chief economist at Lloyds TSB, admitted that families are having a particularly rough ride at the moment.

"Contrary to expectations at the start of the year, the squeeze on consumers not yet beginning to ease" said Foley.

"Although overall inflation declined in the five months to March, prices of essentials are rising at an increasing rate, whilst at the same time growth in incomes has slowed.

"The pace of economic recovery is thus likely to remain very weak over the next few months at least, with subsequent improvement dependent on a stabilisation in living costs and impetus for growth from outside the consumer sector, particularly exports."

In times of such austerity, budgeting tools such as this savvy spending calculator can prove all the difference.

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