Forecasting For The Future - Annual Budgets Are Not Getting Any Easier To Create!

UK consumer spending power has fallen dramatically due to a large rise in the cost of living, according to research by Ernst and Young.  Their annual discretionary income study says that the average household is 15% worse off than it was five years ago.  After household bills and tax, the typical family has less than 20% of its gross income remaining – compared with 28% in 2003.

Sadly, it suggests that with increases in rates and fuel “the worst could be yet to come”.  How will this affect the consumer spending in motorsport – in real cash terms, the average UK family currently has £756.00 per month to spend compared to four years ago when they had £910.00 per month.  It is expected that lifestyle, luxury and entertainment cuts will be made to the family budget – and this could affect spending in motorsport.

The report says “the significant decline in discretionary income means consumers are no longer in a position to spend as freely as they have done in the past”.

Following the announcement that sales in the department store chain, John Lewis, were down over 8% in recent trading and that Marks & Spencers had reported a drop of over 5% in the last quarter, together with a warning from their Chief Executive, Stuart Rose, that consumer spending was set to remain under pressure for the next two years. 

To take a closer look at this survey, go to www.ey.com