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UK Consumer Outlook: Prepare for lift off

Does the UK consumer have the power to ramp up spending in 2021?

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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.

women shopping

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)



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