Consumer nerves ‘heightened by political uncertainty’

A hung Parliament will increase uncertainty amongst consumers and see them rein back on spending.

Consumer nerves ‘heightened by political uncertainty’

So says Mintel, which believes that householders will now concentrate on getting their finances in order.

Commenting on the election result, Mintel spokesman Richard Perks, said: “For consumers, abstract discussions about yield curves and deficits take second place to what this might mean for unemployment and mortgage rates.

“Consumers are nervous. They can see there is economic pain ahead, and after a binge last Christmas, Mintel expects them to start concentrating on their finances. A hung Parliament will do little to change that apart from add to the level of uncertainty.

“Nervous consumers are cautious consumers. They will be delaying big-ticket purchases and redoubling efforts to pay off debts and to increase savings.”

Recent Mintel research shows that people are already wary about the state of the economy. When asked about their main concerns, 62% said that they were worried about the state of the economy, and 53% about their own financial situation.

A third feel that interest rates will rise, half think that unemployment will be up and two-thirds think that taxes will be higher by the end of the year.

Said Perks: “The natural reaction among consumers to uncertainty and economic worries is to concentrate on getting their finances in order.

“Mintel has long suggested that, for many people, the recovery will feel more like a recession than the recession itself did. A hung Parliament may delay the spending cuts that all commentators feel are necessary, but many will feel that it is just delaying the inevitable.”

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