Spending hits ten-year low in households

Julian Harris
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FAMILY spending in the UK has fallen to a ten year low, according to government figures released yesterday.

The average weekly spend dipped to £455 per household last year, down from £471 in 2008, said the Office for National Statistics (ONS).

The figures reflect households tightening their belts amid recession, as the economy shrunk by five per cent in 2009.

Yet spending in London remained considerably higher than in other UK regions. The average household in the capital spent £552.30 per week between 2007 and 2009, over £90 higher than the British average.

Households in the rest of the south east were close behind, spending £523.90.

The north east was the region with the lowest weekly spend, averaging out at just £387.20.

The high costs of London living were largely attributed to spending in the housing, fuel and power category. Londoners’ spending on these items was 48 per cent higher than people in the rest of the country.

Despite the London effect, spending was higher among people living in rural areas. The average countryside households spent around £50 more per week than its counterparts in towns and cities.

The editor of the report, Giles Horsfield, said that cuts in interest rates may actually have reduced some spending.

“Higher expenditure on housing related costs such as rent, electricity and gas were offset by lower spending on mortgages,” he said.

The results are based on the Living Costs and Food Survey (LCF) of 6,000 households across the UK.

The fall in spending for 2009 mirrored data released on Monday by the Office for Budget Responsibility (OBR). The independent watchdog listed household consumption for 2009 as 3.3 per cent down on the previous year.

Yet the figures provide hope that spending for 2010 will bounce back. The OBR estimate a 1.1 per cent jump in household consumption for this year, an upward revision of 0.8 per cent from the projection made in June’s emergency budget.

The OBR forecast consumption growth of 1.3 per cent in 2012, rising to 2.1 per cent by 2014.