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Ring in the new boom for 2021
January 3, 2021
A happier new year? There's a £100bn pot of gold at the end of the rainbow for big-ticket consumer spending once the vaccine helps the country get ahead of coronavirus.
The positive forecast by several leading analysts holds out hope for better times during these dark days when most of UK retail is closed, including flooring retailers.
Bank of England chief economist Andy Haldane says: "As people's incomes held up and spending was restrained, they have amassed around £100billion of excess savings.
"People will use their involuntarily-accumulated savings on a new house or a new car,' Mr Haldane said. 'Plenty of that pent-up demand is still in the tank... there are plenty of those savings still to be used. There is scope there for the vaccine to release more of that demand."
The £100billion treasure chest is concentrated among the better-off, who carried on receiving most of their incomes during lockdown but saw their spending plunge, said Mr Haldane in an exclusive interview with the Daily Mail.
Other economists agree. Doug McWilliams, of the Centre for Economics and Business Research, said: "Our analysis has shown there are billions of unspent savings... if some of this pile of money is spent it will be a big positive for the economy."
Hedge fund economist Dr Savvas Savouri predicts that 'enforced' savings would be released like 'a coiled spring' – but the impact has not been included in OBR forecasts. 'We must not underestimate just how much pent-up demand there is within the UK," he said.
Hedge fund economist Dr Savvas Savouri predicts that 'enforced' savings would be released like 'a coiled spring' – but the impact has not been included in OBR forecasts. 'We must not underestimate just how much pent-up demand there is within the UK," he said.
UK consumer confidence has jumped by the most in eight years in December, boosted by the launch of the coronavirus vaccine programme.
The upbeat result from leading market researchers GfK includes its Major Purchases Index which covers furniture, flooring and other big-ticket spending intention. This Index rose six points to a score of -22, a reading bettered only once since the beginning of the Covid crisis.
The upbeat result from leading market researchers GfK includes its Major Purchases Index which covers furniture, flooring and other big-ticket spending intention. This Index rose six points to a score of -22, a reading bettered only once since the beginning of the Covid crisis.
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