Consumers continue to spend cautiously

Data for the early part of December suggest that consumers are in a reasonably positive mood in the run-up to Christmas. And there is still the potential for retailers to enjoy a further pick-up in sales by the close of the festive period. But it is less clear whether Q4 will cap the year off with another quarter of growth in consumer spending. The foundations for a sustainable rise in spending should be stronger in 2014, with real earnings set to start growing again, employment continuing to rise and the banking sector returning closer to normality. So for the first time in several years, retailers should be able to look forward to the New Year with a degree of optimism.