Reuters reports that British consumers cut their spending for the first time in nearly four years last month, figures from credit card firm Visa showed, as households turned more cautious even before last week’s shock election result. It cautioned that the Bank of England expects further tightening of belts post election.
UK consumers have been living off credit for years, happy to buy today rather than wait for tomorrow. Well with the prognosis for the foreseeable future full of deep downside risks and limited upside potential, expect consumers to apply the emergency brake.
Jeremy Corbyn is today’s Pied Piper of Hamlin. He knows that by ending austerity and kicking Brexit into the long grass, he has a vote winning formula. But of course, people of my generation remember full-blown Sterling crises and that Labour always leaves the cupboard bare.
Speculators will benefit from the uncertainty and sadly poorer people will panic precipitating a greater personal crisis.
My advice is to ride it out by battering down the hatches.