To ask His Majesty's Government what assessment they have made of the impact of (1) current consumer spending, and (2) the declining inflation, on the economy.
Answered on
21 February 2024
Household consumption is the largest component of expenditure in the economy, accounting for around 60% of GDP. In Q3 2023, household consumption was 0.8% higher than in the same quarter of 2022, while consumer confidence reached a two-year high in January 2024. In the Office for Budget Responsibility’s (OBR) November 2023 forecast, consumption was forecast to grow by 0.5% in 2024.
Inflation has more than halved, but it remains a challenge. Inflation reduces real incomes, creates uncertainty, and threatens our growth outlook so it’s essential that the government continues with its efforts to drive it down and not fuel it further.
The OBR are the government’s official forecaster. They will update their economy forecast, including an assessment of changes in consumption and inflation, on 6 March.