UK: Storm clouds continue to gather over the consumer

An upward revision to the estimate for Q4 2021 took the quarterly UK GDP series to within a whisker of its pre-pandemic level. But the expenditure breakdown suggests the recovery has been very uneven and heavily reliant on the public sector.

What you will learn:

• Consumer spending was still 1ppt short of its pre-pandemic level in Q4.
• And though the recent recovery in social consumption should mean most of the lost ground was made up in Q1, the outlook for the rest of 2022 is troubling.
• In particular, the scope for households to offset the squeeze on real incomes by saving less looks increasingly limited.