Consumers are feeling more positive about their personal financial situation but worried about the UK’s overall prospects, according to July’s Lloyds Bank spending power report.
The monthly barometer, which tracks both spending habits and consumer confidence, found that in the weeks following the vote to leave the EU, almost 70% of consumers said they believed their own personal finance situation was either “excellent”, “very good” or “somewhat good” – the highest level since the survey started five years ago.
The report, conducted in conjunction with Ipsos Mori, also found that spending on essentials such as food, drink, rent and utility bills rose for the first time since November 2014, albeit by only 0.1% on the previous year. Earlier this month the Office for National Statistics said retail sales rose 1.4% in July.
Lloyds asked 2,000 adult bank customers about their current and future spending habits. The findings will comfort those who feared the Brexit vote would send the UK economy into freefall, but caution others – not least because it revealed that in July, pessimism increased markedly about the prospects for the overall UK economy.
Nearly two thirds (62%) of respondents said they believed the country’s financial situation was “not good” or “not good at all”. This compares with 55% who felt similarly negative about the wider economic outlook when asked a month earlier.
People said they are also feeling less positive about the overall employment situation, with 50% of respondents now feeling “not very good” or “not good at all”, compared to 46% in June.
The findings chime with recent forecasts of a slowdown in economic activity in the second half of 2016, which prompted the Bank of England to lower interest rates to 0.25% earlier this month.