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Shoppers expect household budgets to shrink in 2017

Brexit will top the list of concerns for UK consumers in 2017 and almost half expect to have less disposable income, new research has found.

More than a quarter (28%) of consumers surveyed by research firm Retail Economics listed Brexit as their top concern this year, followed by a lack of savings (18%) and a weaker economy (13%). 

Almost half (48%) said they will have less disposable income in 2017, compared to last year.

When asked about their finances, a quarter (25%) of shoppers said they were “just about managing”, while 22% said they were “a little concerned”.

Richard Lim, chief executive of Retail Economics, said: “Concerns around Brexit, a weaker economy and rising inflation are likely to define 2017 for many households around the UK. Inflation is expected to hit 3% this year, which will erode disposable incomes and put the least affluent households under significant pressure.

“Retailers’ hedging strategies protected households from the immediate impact from the collapse in sterling last year but as these contracts begin to unwind inflation will accelerate sharply.

“While some businesses will take a hit on margins rather than passing on the full impact of rising costs, households will have to share some of the pain. How much pain and how quickly it feeds through will be critical in determining the strength of spending this year.”

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