“Notwithstanding the uncertainty around Brexit at the time of the survey, households’ expectations for their own financial situation held up in the latest survey,” the Bank of England (BoE) noted in its latest Quarterly Bulletin. “Though spending expectations and expectations for the wider economy remained more subdued.”
The British pound largely ignored this publication as it refrained from commenting on the policy outlook. As of writing, the GBP/USD pair was up 0.12% on the day at 1.3022. Below are some additional key takeaways.
“Evidence from the survey suggests households would cut their consumption in response to an increased risk of losing their job should the unemployment rate rise sharply. “
“Underlying UK GDP growth has slowed materially this year. That slowdown reflects weaker global growth, driven by trade protectionism, and the domestic impact of Brexit-related uncertainty, with investment by businesses particularly affected.”
“A rise in inflation would reduce the spending power of households in the absence of a rise in incomes.”
“In the short term, some households could choose to dip into their savings or increase their borrowing in order to carry on buying the same amount of goods or services.”
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