A survey for Consumer Focus Wales reveals that 72% of people in Wales are worried about the rising cost of living, with nearly fifty per cent saying that they are finding it harder to manage financially than a year ago.
26% believe their cash problems will get worse – and 49% said they had no savings. The implications for the Coalition’s economic plans are very negative.
Of course, this is bad news in itself, but it is also worrying for the economic health of the country. People are spending less across a range of goods and services:
- 41% said they are spending less on socialising;
- 41% spend less on clothes/shoes;
- 27% say they are spending less on overseas holidays;
- 23% are using the car less.
Surveys like this underline just how weak the recovery is. Essentially, recovery can come from four sources; one is the government, but that is impossible when huge cuts are being implemented. If foreigners buy more from us and we buy less from them, that can boost recovery as well, but as I’ve pointed out, that seems unlikely at the moment. A third is private business, and Nicola has shown how weak those hopes are. That only leaves household spending – which isn’t going to come to the rescue while consumer sentiment looks like this.
This underlines Adam’s queries about the reliability of the Office for Budget Responsibility’s forecasts for jobs growth. The Coalition continues to underestimate the risk of a renewed recession.