British household spending fell most since 2008 during pandemic

BRITISH consumers reined in spending at the sharpest pace since 2008 during the coronavirus pandemic, led by a drop in visits to restaurants and hotels, government figures showed.

Housing, fuel, power, food and transportation-related contributed to a weekly spend of £375 (S$625.89) in the year to April 2021, down by £106 from the year leading up to March 2020, the Office for National Statistics (ONS) said on Monday (Jul 18).

The drop shows the scale of the impact lockdowns to control the pandemic had on the economy. Retailers suffered a stall in sales when consumers stayed home, and uncertainty about the future and job security also prompted more savings.

The ONS said 80 per cent of businesses closed their doors temporarily in the spring of 2020, and 55 per cent experienced closures in January 2021. Hospitality hit hardest, with consumers spending 65 per cent less in restaurants and hotels and 39 per cent less on recreational activities.

The lowest-earning households reduced their weekly expenditures by about 10 per cent while higher-income households trimmed their expenditures by nearly double that amount, said the ONS.

Prior to 2020, low-income families mainly spent money on essentials like housing, power and fuel. High-earners spent more on discretionary items like hospitality, recreation and transport.

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Some businesses did better with consumers confined to their homes. People spent 21 per cent more on TVs, videos and computers. While cinemas and theatres suffered a big drop in earnings, online shopping gained traction, the ONS said. BLOOMBERG