The consumer economy

While consumer confidence has slipped back a little in recent months (Graph 3), we remain of the view that 2015 will be the first year of a robust consumer recovery across the UK.

Click graph below to enlarge

The combination of low inflation and further delays in the inevitable rise in the base rate will make the average UK household feel richer, and the latest employment numbers should also add to the general feeling of consumer positivity.

While some coverage of the slowing rate of inflation has focused on how shoppers might see this as a reason to defer spending, we believe that the fact that the main drivers of this low level of inflation are fuel and food limits the prospect of waiting for a better deal next week.

The main lurking horrors for this year are probably around a potentially inconclusive election result, or an EU referendum. Both would have a negative impact on consumer confidence, though the former would be shorter term than the latter.

Ultimately the key retail economy theme for 2015 is the return of real earnings growth, and this can only be good news for retailers and landlords alike.

Taken from
UK Shopping Centre and High Street Bulletin Q4 2014