While consumers may be able to tell from the cost of their weekly shop that the Brexit referendum has made life more expensive, this week we will get some indication of how the wealth of the nation as a whole has fared since the vote last year.
Credit Suisse is due to release its annual global wealth report, containing details of how the average household has withstood a year of currency drops and inflation rises. Last year the report revealed that £1.2bn had been wiped off the wealth of the UK after the vote, but that Britain remained a very attractive place for ultra-high net worth individuals, beaten only by the US and China.
And the super-rich appear not to be suffering to the extent the average household is. A recent report from UBS and PwC showed that billionaires across the world increased their combined wealth by almost a fifth in the past year.
The result is that not since the turn of the 20th century – when families such as the Rockefellers and the Vanderbilts were at their peak – have the privileged few held such a concentration of wealth. Concerns have risen that society might strike back at the growing differences in wealth with increases in taxes, a tactic that the International Monetary Fund favours.
Rate rise could tip those close to the edge over it
Britain’s simmering debt crisis is to come under the scrutiny of MPs this week when the first submissions in the Treasury select committee’s inquiry into household finances are heard.
The spiralling levels of debt in the UK have caused no small amount of concern among charities. The amount of debt built up on personal and car loans and credit cards is now at levels similar to those just before the 2008 financial crash. Committee chair Nicky Morgan has said they will examine policies aimed at helping households achieve the right levels of savings and look at how sustainable current levels of debt and consumer credit are.
Debt charity StepChange, which has long been highlighting the growing crisis, estimates that almost 3 million people are in severe financial difficulty and 9 million are close to the edge. There are also fears that the recent increase in interest rates – from 0.25% to 0.5% – will further increase pressure on households already on the edge. It is estimated that the base rate change could put an additional £1.8bn on interest payments for those on variable rate mortgages.
A cold, cold winter on our high streets?
The health of the high street as we approach the Christmas season will become apparent on Friday, when official figures on retail sales for October are released.
Although we are now in the run-up to the festive period, traditionally a boom time for retailers, the outlook is grim as slow wage growth and the increasing cost of goods puts a dent in spending power. Last month it became apparent that sales had slumped in September, leaving the sector at its lowest growth rate in four years. There is little room for hope that things will have improved in October.
Investec said it is expecting to see poor results for retailers. Separately, it also expects to see wage growth remaining as sluggish in the labour market data, which is coming out on Wednesday.
Higher inflation has been blamed for the poor figures at the tills, and the months leading up to Christmas are anticipated as being slow. Worst-hit have been supermarkets and food retailers, as well as department stores and petrol stations. Some analysts have suggested that sales of electronics, such as computer games, mobile phones and laptops, have suffered as consumers hold fire until the Black Friday discount days closer to Christmas.
