Underlying household spending remains strong

The underlying picture for household spending remains positive. Real household spending in Q3 looks likely to have grown by around 0.8% q/q, the rate seen in Q1 and Q2. And while retail sales volumes fell in October and private new car registrations were down on a year earlier, they were coming off strong bases. What’s more, the fundamental drivers of household spending remain positive. CPI inflation stayed slightly negative, wage growth is solid and employment growth has resumed after a temporary blip earlier in the year.