The UK has been a credit-loving country for years and like the US, is going to have to learn how to survive with less easy credit. It's also interesting to see that the Tories in the UK are proposing tax incentives for savers as opposed to handouts for spending. This is the heart of the problem that we're facing in such economies where we need people to save and learn how to be frugal again but we also need them to spend to keep the economy afloat. Decades of bad policy won't be turned around overnight and maybe some of both plans needs to be examined on both sides of the pond.
A quarter of all British families will have no disposable income in 2009, dealing yet another blow to the beleaguered retail sector.
In November, a survey by Nielsen, the market research firm, and trade body the British Retail Consortium (BRC) found that 21 per cent of families had no spare cash left after essential living expenses. However, sector insiders expect this to grow to at least 25 per cent by the spring.
A PricewaterhouseCoopers (PwC) survey last week showed that six in 10 people believe they will have less disposable income in 2009 than they had last year. Those in the lower socio-economic DE classifications were particularly gloomy, with nearly 70 per cent convinced they would have less money to spend on the high street.
Stephen Robertson, director-general at the BRC, said: "A fifth of all families had nothing left to spend [after core expenses] and I think that will get worse during 2009."
A leading retail figure predicted that the next Nielsen/BRC survey, due in May, will show at least 25 per cent of families lacking the cash needed for minor luxuries.