Insurance brokers hoping that their clients will enjoy stability in spite of the Brexit decision have been given some good news – but simultaneously dealt a blow by the idea that consumers are being increasingly cautious with their cash.
According to the latest Lloyds Bank Spending Power Report, a monthly barometer that tracks both spending habits and consumer confidence, four in five consumers believe their job security is ‘excellent’, ‘very good’ or ‘somewhat good’ – a total of 81% and the highest level in the survey’s history, marking a monthly increase of four percentage points.
The high level of confidence also coincides with a fall in unemployment with the Office of National Statistics revealing that unemployment fell by 39,000 compared to the previous three-month period. Indeed 65% of consumers are also said to feel positive about their personal finances – a leap of 2% compared to the same point last year.
However, the report, conducted in conjunction with Ipsos MORI, also reveals a decline in positivity towards the level of inflation. While a majority (54%) of consumers remain positive about inflation, this is down from 59% in July, and from 64% in August 2015.
This increased concern also seems to be affecting consumers’ future spending plans with 76% saying they expect to save some or all of their extra disposable income, up from 72% in July 2016.
Commenting on the results, Robin Bulloch, managing director of Lloyds Bank, believes there is generally good sentiment in the marketplace.
“The prospect of leaving the EU continues to dominate political discussions and much of the media – with little certainty over what this will mean in practical terms for households and consumers,” he said.
“In the meantime, whatever the opportunities and risks of the referendum result, it is encouraging to see such confidence in the jobs market in particular. The overarching message from UK consumers is one of cautious optimism, which explains an increasingly careful and judicious approach to future spending plans.”
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