There is considerable uncertainty as to just how willing and able consumers will be to spend beyond the third quarter. Indeed, persistent consumer caution is seen as a significant risk that could limit the UK recovery.
The fundamentals for consumers have taken a clear downturn as a result of COVID-19, and they are likely to remain under pressure in the near term at least. Many people have already lost their jobs despite the supportive government measures – as was highlighted by employment falling by 695,000 over April-August […] – while others will be concerned that they may still end up losing their job once the furlough scheme ends in October.
Consumers may adopt a cautious approach to major discretionary purchases given the uncertain economic environment and heightened job insecurity. Consumer confidence currently remains at a relatively low level despite coming off recent long-term lows. Additionally, spikes in Coivd-19 cases over the coming months could magnify consumer caution and weigh on shopper footfall.