Is a £170bn spending spree coming?
Since COVID hit in March 2020, we’ve seen restrictions of some kind or another. Through it all, we’ve been hoping that when they lift, there’ll be a rush of pent-up demand that’ll help the economy recover along with many of the UK’s small businesses.
A recent report suggests that this is the case, to the tune of £170bn!
Chris Hare of HSBC has said that total savings in 2020 amounted to this enormous figure, which equates to 7.7% of GDP. He went on to describe the sum as ‘a huge amount of potential economic stimulus.’ He went on to say that even if families merely stop saving this year, this will still represent a big surge in spending compared to 2020, and boost the economy.
There are various other positive reports too:
- £1bn of consumer credit was paid down in the run-up to Christmas, a time when it usually increases.
- Hargreaves Lansdown, the investment platform, have said that younger people are investing in stocks and shares far more than previously, and have seen a 10% jump in profits as a result.
- The Bank of England reports debts such as credit card and car finance fell by £16.6bn during 2020, funds which would previously have been spent on holidays, socialising and commuting costs.
- Bank deposits increased by nearly £21bn in December, which before the pandemic increased by £5bn per month.
We’ve spoken to lots of people over the last eleven months who have all said the same thing – ‘we can’t go out, we can’t travel, we can’t spend….’. Though we can’t do many of these things at the moment, there will come a time when we can, or when the weather improves and restrictions loosen, when we’ll be able to do at least some of it.
There is every indication that consumers will come out of lockdown with a strong desire to splash out, to treat themselves or just to get back into old habits.
A really good idea right now would be to think about how you can tap into that spirit of release or reward to ensure that some of the £170bn flows into your bank account!
Along with the continued vaccine roll-out, perhaps this is another chink of light at the end of what’s been a very long tunnel.
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