Have consumers priced in Brexit?

There is an annual cycle in consumer finances. January, February and March are generally lean months for spending as wallets and purses recover from Christmas. The second quarter of the year sees preparation for the holidays, before a post-summer recovery. Spending then accelerates again, due to the end of year festivities, before the cycle repeats.

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The cost of living squeeze ends….or does it?

Earnings squeeze is over

The combination of accelerating wage growth and an easing in inflationary pressures is clearly good news for consumers. In February, annual UK wage growth (2.8%) finally overtook the equivalent rate of inflation (2.7%) for the first time since the start of 2017. Following the latest figures for March this trend looks set to continue.  The annual rate of UK consumer price inflation (CPI) eased to 2.5% in March – its weakest rate in twelve months. The price of consumer goods (e.g. food & clothing) inflation eased from 3% y/y in February to 2.4% in March.  Conversely, consumer services inflation nudged higher to 2.5% over the same period.

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