UK consumer spending is more likely to decrease than increase, HSBC analysts believe. The group's ...
UK consumer spending is more likely to decrease than increase, HSBC analysts believe.
The group's economist research analysts point out that after seven years in which the consumer has generated more than 100% of the growth of overall GDP, weaker income growth and an unsustainable reliance on personal debt suggests the economy will need help from somewhere else going forward.
There are encouraging signs of this support. Over-investment by businesses in the 1990s looks largely unwound, companies are cash rich and equities have rebounded somewhat while credit spreads have narrowed, according to the group.
John Butler, an economist with HSBC, said: 'All that suggests the downside risks to investment have diminished. Nevertheless, any recovery in business investment is likely to be constrained as many of the original reasons for the correction remain firmly in place.'
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