Surviving Striving or Thriving?

recovery-cooling

In 2011 the UK has experienced very different times. There is fear of a double dip recession. Slight murmurs of doubt turn into nationwide catastrophes overnight. A false sense of security exists. According to the latest NVISION Changing Lives Research there have been global and UK factors causing a push down on UK recovery. The former has been partly caused by a globally integrated financial system and increased commodity prices such as oil and food and the collapse of the Euro is threatening to bring down the entire Eurozone. Consumer confidence has remained very low, it plunged with the VAT increase and has remained the same since.

 

consumer-confidence

Xmas

As a result of low consumer confidence, Christmas shoppers are being savvier. An NVISIONS online survey shows 45% agree their own personal finances are going to get worse, while 46% say they plan to start shopping earlier than usual to help spread the costs. Xmas As a result of low consumer confidence, Christmas shoppers are being savvier. An NVISIONS online survey shows 45% agree their own personal finances are going to get worse, while 46% say they plan to start shopping earlier than usual to help spread the costs.

spending-growth

Against a backdrop of 5% reduction in spending in real terms, consumer electronics have powered ahead with off-the-chart growth (see above). Looking at the consumer spending forecasts, the computing and telecoms categories – as well as clothes – are projected to show strong volume growth over the next five years and home durables are expected to Against a backdrop of 5% reduction in spending in real terms, consumer electronics have powered ahead with off-the-chart growth (see above). Looking at the consumer spending forecasts, the computing and telecoms categories – as well as clothes – are projected to show strong volume growth over the next five years and home durables are expected to recover

consumer-spending-growth

Consumer spending will likely lag a little behind business and export spending but under this scenario consumer spending is forecast to return slowly back towards trned growth over the next few years.Consumer spending will likely lag a little behind business and export spending but under this scenario consumer spending is forecast to return slowly back towards trned growth over the next few years.

 

The Way Forward

  • The economy probably grew in Q3 but the next few quarters are likely to be weak
  • Inflation should fall back in 2012 enabling real disposable incomes to start to rise again
  • If we avoid a double dip then growth should pick up by late 2012
  • A Mild, UK-specific double dip is possible.
  • The Eurozone crisis is a huge thread to global growth and its resolution crucial to the UK’S prospects
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