The Office for National Statistics issued this chart this morning:
The key indicator is the second line down - the aggregate spending.
In February 2021 spending is on aggregate 73% of what it was in February 2020.
But, crucially, despite the vaccines it is still lower now than it was from last June onwards. So far the vaccine programme has not increased consumer confidence.
Sunak thinks it will. I am not convinced, as I suggested yesterday.
It is going to take a long time for people hit as hard as we have been to think that this the moment to spend all their savings.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
All the chart tells us is that people don’t spend as much during lockdown. Which we are currently in. This shouldn’t be a surprise to anyone.
It tells us nothing about how effective the vaccine rollout and it’s effects on the economy – which thanks to lockdown is still mostly closed.
Surely you understand this, don’t you?
The mood was meant to be lifted by vaccines
That appears not to have impacted spending
Surely you understand that, don’t you?
“The wonderful thing about tiggers is tiggers are wonderful things”
Quite hard to spend when everything is shut. When hospitality reopens will be the big test. I think the bounce will be quite big initially due to the novelty and boredom of being subject to your own cooking for a year!
But there are only so many meals that can be sold by restaurants and only so many we can buy
I suspect the bounce will be smaller than expected for that reason
Sure, bookings will be busier on Tuesdays for precisely this reason, but not by enough to change the whole economy
In the USA, many consumers are paying-off their card-debt rather than increase their debt.
And using the “fiscal stimulus” to do so.
I doubt many will be in a hurry to increase their debt problems, and it may take years before spending resumes as before.
Other problems arising from the vaccines are that people are either stupid, or do not listen to advice. The numbers of vaccinated aged people being infected with CV19 have risen slightly. Seems they have waited a few weeks, then resumed socialising. Back to leading a horse to water again..
I think there is going to be a mother of price spikes in key sectors like tourism and hospitality when this is over. I can see canny small businesses repairing their balance sheets for as long as they can. I think that it is worth considering controls or rationing in the short term. Can’t see this going well for price stability, it’s a great opportunity for higher new normal prices.
After a few weeks the demand will not be there
So I can’t see that happening
There are actually things called markets: many businesses are price takers