Renewed income squeeze looms

Real consumer spending looks on course to have grown in the third quarter. And following some upward revisions to past spending, it could rise a touch in 2012 as a whole, compared to our previous forecast for a 0.5% fall. Nonetheless, it will struggle to improve much from here in the near-term. Consumers are facing yet another income shock, with utility and food prices set to rise over the next few months. Although the renewed rise in inflation should be relatively modest, there will be no extra cash to fuel a consumer recovery soon.