(Bloomberg) — The UK’s richest are set to unleash their savings to splash on luxury goods, cars or tech, a report showed, in signs that lower interest rates are boosting demand. Households with incomes of £50,000 ($65,000) and above are planning to increase their spending on big ticket items at the highest rate since the run-up to the festive shopping season in November, according to a Gfk survey conducted between Feb. 28 and March 13.
Its gauge of major purchases intentions among the top earners reached 4 — up 3 points on the month and a dramatic improvement from the -22 recorded in the same period last year. “Higher-income people are starting to feel the impact of the drop in interest rates on their savings,” said Neil Bellamy, consumer insights director at NIQ GfK. “Higher spenders are feeling generally more positive about spending than they were a year ago.
” The findings could represent an early sign of a brightening mood among consumers. UK households have been pocketing their recent real wage gains as a hedge against uncertainty at home and abroad, much to the detriment of the Labour government’s plans to revive growth. Such savings become less lucrative as interest rates fall.
A resilient labor market is also helping the consumer recovery. Wages are still growing faster than inflation, as Prime Minister Keir Starmer has frequently emphasized in recent weeks, and predicted job losses after Labour’s increase in payroll taxes have so far failed to mater.
