I like the way this moves the question of 'cost-of-living' towards being real - and implictly asks the question of 'What is the impact on Tom and Joanna's spending in different types of retail'.
Only implicitly, mind you... I wonder if there is a full study of different income consumers and the impact on their spending on different things.
Presumably some areas of discretionary spending should be very scared. But I know from experience that some things that you think are 'discretionary' turn out to be things that people hold on to tightly.
Hi Robin - interesting points. I'm not aware of a study of the intersection between income, wealth and different spending choices though it would be fascinating read if there was one. Even the apparently simple relationship between income and wealth is quite hard to unpick although the ONS have some figures. I have a hunch that quite a lot of high income folks are actually very indebted and not that wealthy, whereas a lot of apparently low income pensioners will have high wealth - and their spending choices, and reaction to interest rate rises will be very different as a result.
It is a very scary reality for the majority of people with mortgages, especially the ones that stretched to buy during COVID on short-term (2-year fixed deals) as a result of the low interest rates, low energy prices & extremely low (or even 0) stamp duty.
At the time, it seemed great but I always thought it would create a false economy & ramifications could potentially be as bad as 2008!
I'm not sure what the answer is to be honest... I'd probably be an economist & not a recruiter if that were the case :-)
Hopefully, the retailers in the industries which have flourished have saved for the rainy day, because I think it might be a stormy few years...
Your Covid/Stamp Duty point is a really interesting one. I idly follow the property market in the Lakes, and it saw massive price hikes and shortage of availability during Covid as everyone decided to move to the country, but sure enough most of it is back on the market now, which substantiates your hypothesis, I think.
I like the way this moves the question of 'cost-of-living' towards being real - and implictly asks the question of 'What is the impact on Tom and Joanna's spending in different types of retail'.
Only implicitly, mind you... I wonder if there is a full study of different income consumers and the impact on their spending on different things.
Presumably some areas of discretionary spending should be very scared. But I know from experience that some things that you think are 'discretionary' turn out to be things that people hold on to tightly.
Hi Robin - interesting points. I'm not aware of a study of the intersection between income, wealth and different spending choices though it would be fascinating read if there was one. Even the apparently simple relationship between income and wealth is quite hard to unpick although the ONS have some figures. I have a hunch that quite a lot of high income folks are actually very indebted and not that wealthy, whereas a lot of apparently low income pensioners will have high wealth - and their spending choices, and reaction to interest rate rises will be very different as a result.
Hi Ian,
It is a very scary reality for the majority of people with mortgages, especially the ones that stretched to buy during COVID on short-term (2-year fixed deals) as a result of the low interest rates, low energy prices & extremely low (or even 0) stamp duty.
At the time, it seemed great but I always thought it would create a false economy & ramifications could potentially be as bad as 2008!
I'm not sure what the answer is to be honest... I'd probably be an economist & not a recruiter if that were the case :-)
Hopefully, the retailers in the industries which have flourished have saved for the rainy day, because I think it might be a stormy few years...
Your Covid/Stamp Duty point is a really interesting one. I idly follow the property market in the Lakes, and it saw massive price hikes and shortage of availability during Covid as everyone decided to move to the country, but sure enough most of it is back on the market now, which substantiates your hypothesis, I think.