Spending power on the increase
28/06/2011
Price hikes for the cost of essentials have failed to dent the spending power of Britons, new research suggests.
While earnings growth has been identified as the main reason for the rise in spending power in May, it would also appear consumers have been finding new ways to boost their savings to counteract the rise in inflation, with ISA investments always a popular option.
Year-on-year, spending power was up by 4.4% in May, more than reversing the 0.3% decline the month before, and getting the figure back on the trend seen in the first quarter of the year, Lloyds TSB said.
On average, people's incomes were 3.9% higher than the same time last year, which helped them cope with the 2.3% increase in the cost of essential goods and services.
However, almost half (43%) of people said money remained tight, while 65% are spending at least three-quarters of their income on essentials and 21% had to dip into savings or use credit cards to make ends meet.
Copyright © Press Association 2011
