Good news: people are getting better off. At last.
This week’s wages and inflation figures definitively proved that, with pay up 6% and inflation running at just above 3%.
Throw into the mix Jeremy Hunt’s National Insurance cut that came into effect in January (with another on the way in this month’s pay packets) and most people in work should feel the load finally easing. So why are they not spending more?
Today’s retail figures show high streets struggling to get consumers to part with their money. Indeed, if the impact of a sharp rise in spending on filling up the car is stripped out, sales volumes were actually well down.
All sort of factors could be at play. The rotten weather must part of it, although that does not explain why online sales were also lower.
The gloomy news flow also does little to help make people feel more secure about their future. The slow burn of remortgaging is still there in the background.
Fixed rates that were down to around the 4% mark a few weeks ago are creeping back up towards 5% as the promised land of lower interest rates recedes further towards the horizon.
There may also simply be a need to restore the household financial buffers. Last year, at the height of the cost of living crisis, families were dipping into their savings at a record pace.
The country needs stability and more reasons to be cheerful to get spending back on track. The sight of Liz Truss promoting her book is probably not helpful in that respect, a reminder of the autumn 2022 turmoil that got us to where we are now.
Perhaps the Three Lions can help, with a good run in the Euros this summer, just the sort of tonic to the national mood that could get the tills ticking over.
We should not put too much pressure on Gareth Southgate and his squad. There is enough of that already. But come on, England! Your economy needs you.
