Chancellor George Osborne underlined the government’s resolution to forge ahead with its current strategy in his Autumn Statement this week.
That means fresh spending cuts and reductions in welfare and no retreat on a planned increase in APD next April.
The chancellor’s announcements were not unexpected, because despite official figures showing Britain came out of recession in the three months to September, most signs suggest the economy is stagnating and debt remains high.
In November, Explore Research questioned 500 UK consumers on how they viewed the year ahead.
They were asked how they saw their likely employment prospects, household income and spending next year, including on holidays, and how they rated the prospects for their local town or shopping centre.
Those consumers feeling less confident about having a job next year (23%) outnumbered those showing greater confidence (17%).
The good news was that 57% felt their job prospects wouldn’t change. However, those inbetter-off households appeared less confident about their employment outlook than those less well off.
People appeared considerably less optimistic about their income prospects than about employment next year.
Explore Research found 39% expected to have about the same income as this year and 15% expected to be better off, but 44% anticipated being worse off – 15% a lot worse.
Perhaps worryingly for the travel sector, more than half (53%) of those aged 35-54 expected to be worse off and 46% among the over-55s.
Higher income households were just as likely to anticipate being less well off next year as those with lower incomes.
People showed least optimism when asked: “How would you describe the retail outlook for the town or city in which you shop?”
Only 7% thought the outlook for their town was “a little brighter” than a year ago.
Two-thirds (65%) thought it ‘less bright’ and one in four (26%) ‘a lot less bright’.
Half of younger adults and three-quarters of those over 55 agreed with this assessment and there was little divergence by household income.
Asked about likely spending next year, 40% of respondents said they expected to spend less on holidays abroad – against 11% expecting to spend more and 41% about the same as this year.
Spending on overseas holidays was not the only area where people expect to cut back, of course. Respondents also anticipated spending less on mobile phones (35%), clothes and shoes (30%), children’s goods (30%), days out (40%), evenings out (50%) and holidays in the UK (36%). In each case, no more than 8%-11% expected to spend more.
The only areas where respondents expected to spend more were on food and household bills; 31% expected food to cost more (and 50% the same) and 50% anticipated higher household bills.
More than one-third (36%) of 18-34-year-olds expected to spend less on overseas holidays next year than this – three times the amount who thought they would spend more (12%).
Among 35-54-year-olds, 48% expected to spend more and 7% less. The figures were not much better among the better off, with 39%expecting to spend less against 13% more.