Latest figures from the Bank of England are showing that British households are still paying down debt and building up their savings despite the end of lockdown, offering fresh hope that businesses will benefit from a summer spending splurge.
These figures have shown customers paying back £400 million of mostly credit card debt throughout April and May, which is the ninth month running that they have done so.
The amount of cash in bank accounts has risen by another £10.7 billion, which is much less than in previous months. This suggests that households have already begun to loosen their financial belts and spend a little more.
In addition, there has been a 9.2% rise in retail sales, which suggests that people are itching to spend, as lockdown and spacing restrictions are coming to an end.
Other measures have suggested that there is £60 billion of pent-up money ready to be unleashed, though some economists admit that it is impossible to be sure how many consumers will return to old spending habits and how many will remain cautious.
Such a spending splurge is bound to result in inflation, with uncertainty on how problematic this could be. The Bank of England are watching this closely but believe that it will be manageable. Some inflation is due to the lack of supply of goods for manufacturing, something that should ease with time. It was warned by the British Retail Consortium that shop prices will rise in the autumn, due to high food, shipping, and commodity costs.
Mark Richardson, Partner at BB&J Commercial commented “with these extremely positive figures, we are intrigued to see what this will mean for retail and warehouse spaces. We have seen demand rise for these kinds of properties and we have a wide variety currently available. It is extremely encouraging that businesses have not retreated on their plans to move and we hope to see this continue in future.”
