Can UK consumer spending support an economic recovery?
Read time : 21 mins Added: 08/04/2020
In this report, we take a look at four considerations which will impact consumer spending in 2021. It includes key facts and figures from 2020 to predict how this might change in 2021.
Main insights include:
- More than one in three people in the UK have received their first vaccination, proving the ‘roadmap’ out of lockdown could be on track.
- Resilience of retail sales activity last year suggests that households’ appetite to spend has remained strong during the pandemic.
- The partial reopening of the economy in the third quarter of 2020 saw a sharp turnaround in those areas most impacted by the initial lockdown measures.
- The sharp rise in household savings over the past year suggests that (on aggregate) households are well placed to support a sizeable increase in consumer spending.
The data suggests households have a strong appetite to spend and we can see considerable pent up demand. However government policy and lingering health concerns will ultimately decide how long the recovery in consumer spending will last.
To discuss any of the details in this report, contact your Relationship Manager.
About the authors
Elena Paitra
Head of the Consumer Sector at Lloyds Bank.
Nikesh Sawjani
UK Economist, Economics and Market Insight.
Previous edition - Don’t underestimate the UK consumer
In 2019 the UK economy experienced some loss of momentum caused by the elevated economic and political uncertainty, find out more here; Don’t Underestimate the UK Consumer(PDF, 1.5MB)
Related links
Important legal information
Lloyds Bank is a trading name of Lloyds Bank plc, Bank of Scotland plc, Lloyds Bank Corporate Markets plc and Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH.
Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Bank of Scotland plc. Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. SC327000. Lloyds Bank Corporate Markets plc. Registered office 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 10399850. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278, 169628 and 763256 respectively.
Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH is a wholly-owned subsidiary of Lloyds Bank Corporate Markets plc. Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH has its registered office at Thurn-und-Taxis Platz 6, 60313 Frankfurt, Germany. The company is registered with the Amtsgericht Frankfurt am Main, HRB 111650. Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH is supervised by the Bundesanstalt für Finanzdienstleistungsaufsicht.
Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all business customers will be covered.
While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.