UK consumers displayed their highest level of confidence in disposable income in three years in the first quarter of 2015, according to the latest Deloitte Consumer Tracker.
Deloitte’s Q1 2015 Tracker, published today, identifies travel and leisure as the area most likely to attract increased spending.
Business advisory firm Deloitte issues the Consumer Tracker each quarter, based on a survey of 3,000 UK adults.
It reports confidence in disposable income 30 points higher than when Deloitte began the Tracker in the third quarter of 2011 and suggests 2015 could be the best year for consumer spending in 10 years.
However, Deloitte reports two out five consumers (40%) are “worried the General Election could impact their financial situation”.
Deloitte assessed consumer confidence in the first quarter as seven points higher than a year ago, with the travel and leisure industries benefitting most.
It found a net three point improvement year on year in spending on “going out” in the first quarter and a one point improvement in spending on holidays.
Deloitte chief economist Ian Stewart said: “With the recent return to real wages growth and further falls in unemployment, consumer finances are starting to normalise.
“This points to an acceleration in consumer activity and suggests 2015 may well be the best year for consumer spending since 2005.”
However, he said: “Consumers see the election as the number one concern in terms of their financial situation, eclipsing worries about pay, interest rate rises, public spending cuts and job insecurity.”
Graham Pickett, head of travel, hospitality and leisure at Deloitte, said: “Consumers’ financial positions are strengthening and, with falling prices for food, energy and petrol, people are spending more on what they enjoy.
“This increase in spend is more on leisure pursuits and holidays than in the retail sector.”
Pickett said: “The improvement in consumers’ financial positions looks set to continue, which should mean further rises in spending this year.”
He added: “The outlook for the economy is positive. The only fly in the ointment could potentially be the election, as people need certainty.”
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