Its curtains for UK consumer spending

Are you taking part in what many retail analysts are describing as a consumer spending binge this Christmas?  It seems that consumers in the UK know that some tough times are around the corner, but are splashing out on one, last big Christmas before the real period of austerity starts to bite…

This article in the Guardian makes for an accessible resource for business students who need to appreciate the factors that affect the overall level of consumer spending in the economy. 

As a core part of UK GDP, what happens to consumer spending is a key driver of the rate of economic growth.  Businesses who rely on consumer spending for their revenues will be paying close attention to a variety of negative factors that may mean that 2011 is a really tough trading environment. Several factors are mentioned in the article including:

- The rise in VAT from 17.5% to 20% from 4 Jan 2011 - which increases the price of most consumer goods and services overnight
- Rising unemployment as government spending cuts are implemented in full force
- An increase in employees national insurance contributions (which reduces take-home pay and disposable income)
- The loss of a variety of govt benefits, including child benefit for higher income households and ERA for households with students in further education
- A range of inflationary price increases on everyday services like rail fares and postage

Most of us are going to find our disposable income is pretty tight in 2011.  So what do we do?  Simple. We invest in new pairs of curtains.  Demand for curtains has soared (according to the article) as households make an effort to spruce up their lounges and bedrooms ahead of the arrival of hoards of relatives and friends over the Christmas holidays.  Now, who would have predicted that?

Revision Presentation - Unemployment & Business [6 Apr 2012]
Revision Presentation - Inflation [6 Apr 2012]
Revision Presentation - Business Cycle and Economic Growth [6 Apr 2012]
Inflation for Business Students [27 Mar 2012]
Economics for Business: Is an economic recovery underway? [28 Feb 2012]
Unemployment and motivation [28 Dec 2011]
Batten down the hatches - strategies for the next downturn [24 Oct 2011]
Marketing in an age of austerity - Live Well for Less [20 Oct 2011]
Strategies for success on the beleaguered high street [6 Sep 2011]
Motivation in a time of austerity - financial benefits become more important [27 Jul 2011]
Economic Environment: Debt bombshell [28 Apr 2011]
Is the role of inflation over inflated? [30 Mar 2011]
AQA unit 4 - some really good evidence here [29 Mar 2011]
The UK Economy - Economic Growth GDP [15 Mar 2011]
The UK Economy - Consumer Spending [15 Mar 2011]
The UK Economy - Inflation (CPI) [13 Mar 2011]
Britain is back in recession (well, consumers think we are) [23 Feb 2011]
The business impact of weak consumer spending [6 Feb 2011]
Government and the Economy lesson plan [30 Jan 2011]
2011 - A chance for retailers to slip in some sneeky price rises? [14 Dec 2010]
Britain’s changing High Street - Poundland, nail bars and empty shops [8 Dec 2010]
Sectors of the Economy - Online is Worth £100bn [30 Oct 2010]
From public sector to private sector - will outsourcing take-off? [16 Oct 2010]
A beginners guide to GDP [30 Aug 2010]
Fiscal Policy - Where Does the Government Raise Finance? [30 Aug 2010]
How inflation affects consumers [27 Aug 2010]
Inflation and profit margins - lessons from the market [27 Aug 2010]
Lost in translation - demand from public sector to dry up? [4 Aug 2010]
A significant rise in unemployment ahead for the UK [16 Jun 2010]
Supermarkets set for a new price war? [13 Jun 2010]
BUSS4 UK Recession - Data Burn [15 May 2010]
A good example to use when explaining what firms do as they come out of a recession [22 Apr 2010]
Measuring changing shopping habits and inflation [15 Mar 2010]
Data watch - what happened to consumer spending in the UK recession? [4 Mar 2010]
Whiteboard Challenge - Drawing UK GDP [28 Feb 2010]
A CEO’s take on the effect of the recession on UK restaurants [18 Feb 2010]
Business strategies as we emerge from the recession [7 Feb 2010]
Recession Tracker for UK Economic Data [1 Feb 2010]
Introducing business and the economic environment with Darling’s debt dilemma [27 Jan 2010]
BRICS - Economic Growth in the Emerging Markets (Interactive Guide) [18 Jan 2010]
Revision Quiz - Inflation [13 Jan 2010]
Revision Quiz - Government Spending & Taxation [13 Jan 2010]
Flight to value has its impact on the Charity Shops [12 Jan 2010]
Where Does Your Money Go? [16 Dec 2009]
Q&A - What has happened to unemployment in the UK? [27 Oct 2009]
Government Spending - Interactive Guide to Where It Goes [18 Oct 2009]
Is BECTA for the Chop? [15 Oct 2009]
Video report - pound hit by falling inflation [14 Oct 2009]
March towards incorporation gathers pace [3 Oct 2009]
Q&A - Outline the main costs and benefits of inflation [1 Jul 2009]
Q&A - Explain the causes of inflation [1 Jul 2009]
Q&A - What is inflation and how is it measured? [1 Jul 2009]
Video case study - the effect of deflation on businesses [19 May 2009]
Q&A - How are businesses affected by changes in interest rates? [1 May 2009]
Improving cash flow by reducing stocks [1 Mar 2009]
Working with suppliers - the grocery battle [30 Jan 2009]
A Devastating Blow for the Irish Economy [8 Jan 2009]
Economic environment - disposable income takes a dive [4 Sep 2008]
Cash-strapped consumers flock to discounter Aldi [31 Aug 2008]
Lots of hot air over gas and electricity price rises [31 Jul 2008]
Scary Movie 5 - the UK Economy [21 Jul 2008]
Tanker driver strike - was it worthwhile after all? [21 Jun 2008]
Mobeen - evaluating the Eurozone Economic forecasts [8 May 2008]
Belt tightening puts consumer spending under pressure [8 Apr 2008]
Two years of pain as CBI forecast lower growth for the UK [25 Mar 2008]
More evidence of rising raw materials costs affecting profit margins [25 Mar 2008]
Helping Business Students Understand Rising Inflation [21 Mar 2008]
Celebs take the rap for binge drinking [7 Mar 2008]
Supporters count the cost of following a Premiership footie club [5 Mar 2008]
Will income tax have to rise? [30 Jan 2008]
From soap and soup to satnav and sony [29 Jan 2008]

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