UK Household spending lowest for 10 years
Household spending on essentials, groceries, petrol and other day-to-day items has fallen to its lowest level for 10 years as families tighten their belts amid growing fears over the economy.
According to the Office for National Statistics, consumers spent £620million less on food, equivalent to £30 per household, during the three months to the end of June compared with the first three months of the year.
Much of the difference was due to shoppers swapping premium brands for cheaper products and own-brand lines, retail experts said.
Petrol sales and spending on other forms of transport slumped to a level last seen in early 2000. At £28.1billion it was down £820million, equivalent to £35 less per household.
The total spent on living expenses such as holidays, food, clothing, eating out and entertaining over the second quarter fell by £1.6billion.
The marked downturn in consumer spending was reflected in poor British sales figures from Tesco, its worst in around two decades.
With inflation running at 4.5 per cent, Scott Corfe, of the Centre for Economics and Business Research think tank, said: “Consumers have seen a prolonged, substantial erosion in their living standards, which is unlikely to ease until 2012.”
More than a million extra households say they are scrimping to pay the bills compared with a year ago, a survey by Legal & General found. The company said that 11.5million homes, around half, were in danger of sinking into debt.