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Spending power confidence slips to lowest level since May

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Brits' confidence in their spending power fell for the second consecutive month in August to its lowest level since May, according to research by Lloyds Bank.

The fall was largely down to a drop in confidence towards the country’s employment situation. Office for National Statistics Labour Market Statistics reveal unemployment increased by 10,000 during the four months to July.

Brits’ confidence in their personal financial situations and job security also dropped in August.

However, sentiment towards the country’s financial situation as a whole, as well as the UK housing market, have both improved.

Lloyds Banking Group data shows year-on-year essential spending fell at a slower rate in August than July (-1.0 per cent vs. -1.1 per cent) driven by an increase in food and drink spend in August, which accounts for around 40 per cent of each person’s essential outgoings.

Spending on fuel and water bills fell year-on-year, contributing to people’s essential spending being 1 per cent lower than 12 months earlier.

Claire Garrod, head of personal current accounts at Lloyds Bank, said: “Spending power confidence took a step back for a second consecutive month in August, wiping out the improved sentiment built since May. However, levels of essential spending are still lower than they were a year ago, which suggests this blip in confidence may just be a mid-summer slow-down during the holiday season.”

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