Consumer Outlook: September 2009

Consumer Outlook
September 2009
Oxford Economics
121, St Aldates, Oxford, OX1 1HB
℡: 01865 268900, : 01865 268906
: www.oxfordeconomics.com
Contents
SUMMARY TABLE 1
1. UK OVERVIEW 2
2. CONSUMER DEMAND 5
2.1. Consumer Indicators at a Glance..................................................................................8
2.2. Consumer Forecast at a Glance ...................................................................................9
3. FORECAST IN DETAIL 10
3.1. Value of spending by category (£ billion).....................................................................10
3.2. Value of spending by category (% change).................................................................11
3.3. Consumer prices by category (2005=100) ..................................................................12
3.4. Consumer prices by category (% change) ..................................................................13
3.5. Volume of spending by category (£2005 billion)..........................................................14
3.6. Volume of spending by category (% change)..............................................................15
3.7. Spending shares by value...........................................................................................16
3.8. Spending shares by volume........................................................................................17
4. CHARTS 18
4.1. Value of spending by category (% change).................................................................18
4.2. Consumer prices by category (% change) ..................................................................19
4.3. Volumes of spending by category (% change) ............................................................20
5. CONSUMER SPENDING BY CATEGORY: THE MODELLING FRAMEWORK 21
Oxford Economics Consumer Outlook
September 2009
Summary Table
(Annual percentage changes, unless otherwise specified)
2005 2006 2007 2008 2009 2010 2011 2012 2013
Wages and Salaries 3.7 4.0 6.1 3.7 -1.2 0.1 2.5 5.2 6.1
Personal Disposable Income 4.5 3.4 3.4 4.6 0.5 1.2 2.6 4.4 6.0
Real Personal Income 2.0 0.7 0.5 2.0 -0.2 0.5 1.8 2.8 3.5
Total Consumer Spending 2.3 1.5 2.5 0.9 -3.0 -0.5 1.5 2.8 3.6
o/w Durables 6.3 6.6 7.2 2.6 1.4 1.1 3.3 8.6 6.1
Non-Durables 1.8 0.8 1.8 0.7 -3.7 -0.8 1.2 1.9 3.1
Retail Sales 2.2 3.3 4.1 2.6 1.4 0.4 1.3 2.7 3.6
Car Registrations -5.0 -3.9 2.5 -11.3 -17.4 -4.5 4.7 10.5 12.6
Savings Ratio (%) 4.0 2.9 2.2 1.7 4.2 5.4 5.6 5.6 5.5
Financial Balance (% of income) -3.3 -5.4 -6.5 -4.8 -0.8 0.4 0.7 0.4 0.3
Economic Background
GDP 2.2 2.9 2.6 0.7 -4.4 0.7 2.2 3.1 3.4
1
Unemployment Level (millions) 0.87 0.95 0.85 0.94 1.65 1.98 2.02 1.87 1.70
1
Unemployment Rate (%) 2.7 3.0 2.7 2.8 5.0 6.1 6.3 5.8 5.3
CPI 2.0 2.3 2.3 3.6 1.9 0.8 0.9 1.4 1.7
Base Interest Rates (%) 4.7 4.8 6.0 5.5 1.2 0.7 1.2 2.2 3.2
Exchange rates
$/£ 1.82 1.84 2.00 1.85 1.58 1.75 1.75 1.77 1.73
€/£ 1.46 1.47 1.46 1.26 1.14 1.20 1.25 1.33 1.35
1
Claimant count
1
September 2009
1. UK Overview
The second estimate of GDP for 2009Q2 saw a modest upward revision from -0.8% to -0.7%. However,
the severe weakness of domestic demand has left the UK lagging behind many of its competitors. Though
the declines in consumer spending and investment slowed, they still made sizeable negative contributions
to GDP, offsetting the small positive contributions from government spending, stocks and net trade.
The scale of destocking remained significant in Q2 at £4.6bn, suggesting there is plenty of scope for
inventories to contribute positively to GDP growth over the second half of the year. Indeed there is
evidence that this process is already under way, with manufacturing output rising by 0.6% in June and
0.8% in July. The motor vehicles sector has led the way, boosted by what Mervyn King has christened the
‘Honda effect’, where plants have reopened after temporary shutdowns, as well as the effects of car
scrappage schemes, both at home and abroad.
Survey data has also continued to strengthen. The PMI surveys have now reported three successive
months of rising manufacturing output and expanding services activity, while the pace of decline in
construction has slowed markedly.
Though destocking will continue, the pace of it should slow considerably, thus boosting growth.
Meanwhile, consumer spending and investment should make much smaller negative contributions to
growth than in recent quarters, as confidence stabilises and the benefits of monetary and fiscal policy
loosening continue to feed through. Overall, we expect GDP to grow by 0.2% in Q3.
GDP growth is forecast to accelerate in Q4, with the boosts from the turn in the stock cycle and the car
scrappage scheme compounded by consumers bringing forward purchases to avoid the increase in the
rate of VAT. With consumer sentiment fragile, we expect the effect to be more muted than that observed
in Germany in 2007, the most recent comparable example of a pre-announced VAT increase. However,
we still expect to see consumer spending lift GDP significantly in Q4, though some of the boost will be
offset by a greater drag from higher imports.
However, the factors which are set to kick start the recovery in the second half of this year will provide
only a temporary boost. Indeed we expect the reversal of the VAT cut on 1st January to subtract 0.6%
from GDP growth in Q1. With consumers and businesses still looking to rebuild their balance sheets, a
period of weaker growth is in prospect for the first half of 2010. Our forecast shows GDP falling by 4.4%
this year, before growing by 0.7% in 2010.
Early indications suggest that the recovery will be distinctly uneven. Though the activity indicators have
strengthened and house prices have started to rise, the labour market has continued to deteriorate and
credit indicators remain weak.
The Nationwide reported a fourth successive monthly increase in house prices in August, with other
surveys showing similar trends. Yet mortgage lending remains very subdued, to the extent that
2
September 2009
homeowners repaid a net £0.2bn of mortgage debt in July - the first repayment since the series began in
early 1993. Net unsecured lending also declined in July by £0.2bn, while the Bank of England also
reported falling net lending to businesses.
The labour market has also continued to deteriorate, with ILO unemployment up 210,000 in the three
months to July and average earnings growth cooling. The scarcity of credit and rising unemployment will
be a drag on consumer prospects for the coming year, with the weakness of domestic demand the most
significant threat to recovery.
CPI inflation eased to 1.6% in August and, with strong base effects continuing, we expect the rate to drop
back towards 1% over the next couple of months. Though restoring VAT to 17.5% will boost inflation in
early-2010, we expect the degree of spare capacity to ensure that the CPI remains below target for some
time.
3
September 2009
UK: GDP and industrial production UK: Bank of England official interest rate
% year
%
10 8
Forecast
GDP 7
5
6
0 5
4
-5
Industrial production 3
2
-10
1
-15 0
1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 1997 1999 2001 2003 2005 2007 2009
Source: Oxford Economics Source: Haver Analytics
UK: Personal sector saving UK: Government expenditure and receipts

% income % of GDP
16 50
Forecast
12 48
Government
Saving 46 expenditure
8 ratio
44 Forecast
4
42
0
40
Government
-4 Financial 38 receipts
balance
-8 36
-12 34
1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
Source: Oxford Economics
Source: Oxford Economics
UK: Unemployment and the NAIRU UK: Inflation relative to target

% % year
12 5
Forecast
Forecast
11
4
10 NAIRU
9
3
8
2% target
7 2
Actual unemployment
6 (ILO basis)
1
5 CPI inflation
4 0
1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 1997 1999 2001 2003 2005 2007 2009 2011 2013
Source: Oxford Economics Source: Oxford Economics
4
September 2009
2. Consumer Demand
The consumer recession has continued to intensify, with the latest national accounts data showing that
household spending fell by 1.3% in the first quarter of 2009. This was the largest quarterly fall since
1980Q4 and represented the fourth quarterly decline in succession.
The more detailed breakdown showed declines across all categories of spending, with the exception of
clothing & footwear where spending continued to rise strongly in volume terms. However, while this
picture is broadly consistent with weak survey data from the CBI and BRC, it remains at odds with the
official retail sales figures, which reported volume growth of 0.3% in Q1.
Consumer demand was undermined by a 2.4% decline in real household disposable income in Q1. This
was partly due to much lower bonuses than usual, particularly in the financial sector, but also reflected
weaker wage pressures in general and a decline in employment, both of which are likely to remain a drag
on consumer demand throughout this year. The sharp drop in incomes also caused the savings ratio to
drop back from 4% to 3%, though excluding the previous quarter this is still the highest rate of saving for
two-and-a-half years.
Survey data suggest that the pace of decline in retail spending has eased during Q2, though the weather
and timing of Easter may have distorted these figures and official figures have been particularly volatile
from month-to-month. Consumer confidence has continued to strengthen gradually, though it remains
very weak in a historical context.
A number of factors point to further significant declines in consumer spending through 2009. Falling
employment and subdued earnings will continue to depress incomes, while the threat of unemployment
will further encourage precautionary saving. Consumers will also seek to try to rebuild their balance
sheets following the sharp declines in house and equity prices over the past eighteen months.
Our forecast shows consumer spending declining by 3.0% in 2009 followed by a further fall of 0.5% in
2010. This consistent with the savings ratio rising back to an average of 5.6% in 2011.
As a result of the low number of housing transactions, the demand for household goods is set to remain
subdued. We expect real (i.e. volume) demand for household goods in 2009 to fall by 5.1%, followed by
a 2.3% decrease in 2010, with sales of furniture and floor covering forecast to under-perform. From 2011,
the demand for household goods is forecast to grow more in line with the overall consumer spending.
Spending on ‘white goods’ is expected to fall by 5.1% this year, although sales will be helped in Q4 as
consumers bring forward their spending prior to the reversal of the VAT cut in January. But once the
reversal is in place, consumers are expected to rein in spending by an additional 1.5% next year. By
2013, real spending on household goods is forecast to be around 0.9% below its 2008 level.
A sharp increase in alcohol prices this year of 9.1% is partly thanks to a rise in duties and a cut back on
non-essential spending is likely to cause a fall in real spending on alcohol of 4.9% this year.
5
September 2009
Despite heavy discounting – prices of clothing and footwear are expected to fall 6.5% this year - we
forecast clothing and footwear spending in volume terms to drop by 3.1% in 2009 and fall a further 1.1%
next year. However continued discounting over the forecast period, in part down to an appreciation in
sterling keeping import prices lower, is expected to help sales volumes to recover from 2011 onwards,
and by 2013, sales in real terms are expected to be 8.2% higher than 2008 levels.
Expenditure on recreation and culture, which accounts for around 13% of total consumption, is expected
to moderate substantially. After the sector enjoyed 6.3% growth in 2008, it is now expected to shrink by
1.9% this year and post just 0.1% growth in 2010 as real spending on recreational services is slashed.
The equipment sector became accustomed to double-digit growth between 1995 and 2008, but this is not
forecast to happen again until 2012. Although innovation and stiff competition in these sectors are
ensuring prices continue to fall throughout most of the forecast period, the pace of decline will ease.
Expenditure growth on durable goods in real terms is projected to fall from 2.6% in 2008 to 1.4% this year
and 0.4% in 2010. Real durable sales growth is expected to recover strongly in 2011 as the recovery
gains traction.
The retail sector commonly distinguishes between convenience goods and comparison goods. The
former refers to daily consumables such as food and drink, while the latter consists mainly of larger ticket
1
items from household goods and electrical equipment to clothing and footwear . As incomes increase
over time, spending on comparison goods normally grows far more rapidly than on convenience goods
and they now account for two thirds of retail expenditure.
Real Annual Growth (2005 prices, % year)

Convenience Comparison Total
Actual: 2000-2008 average 0.9 5.8 3.9
2009 -3.9 -2.1 -2.7
Forecast: 2009-2013 average 1.2 3.4 2.7
Specific annual forecasts are provided on pages 10-17. To summarise, the table above illustrates that
over the next four years, we project expenditure on convenience goods will increase by 1.2% a year.
Meanwhile, average annual growth rates for comparison goods are projected to be much slower than in
the recent past; with spending anticipated to fall over the next two years, over the forecast period as a
whole we expect spending growth to average of 3.4%, compared with the 2000-2008 average of 5.8%. In
other words, we now expect a significant consumer retrenchment and for the medium term to see no
return to a consumer boom.
1
We define both categories fully consistently with ONS COICOP definitions. Convenience goods are defined as food and non-alcoholic beverages, alcoholic
drinks, tobacco, non-durable household goods, newspapers and magazines. Comparison goods consist of books, clothing and footwear, furniture, floor coverings
and household textiles, audio-visual equipment and other durable goods, hardware and DIY supplies, chemists’ goods, jewellery, watches and clocks, bicycles,
recreational and other miscellaneous goods.
6
September 2009
A note on using the forecasts
It is always worth bearing in mind that forecasts are necessarily subject to uncertainty and are liable to
change as events unfold and new, or revised, data become available. While this can be frustrating it is a
natural and permanent fact of a complex and changing economy.
The forecasts represent our current “best guess” estimates, based upon current consumption data and
wider economic trends, the prevailing policy environment and our knowledge of how the various drivers of
consumption interact. Given the complexity of the economy these elements can change unpredictably.
For instance, often there are large revisions to past official data that we have no control over. This can
affect the strength of projections going forward. Alternatively, given the uncertainty surrounding the
economy, there are often differing views as to appropriate monetary policy. An unforeseen interest rate
rise for instance, as we witnessed in January, will lead a reappraisal of general economic indicators and
consumption decisions specifically. Finally, consumption is derived from the decisions of millions of
autonomous households where confidence surveys can be indicative, but not fully capture spending
intentions in aggregate.
The key point is that while we present point estimate forecasts (e.g. furniture sales are forecast to fall
7.5% in 2009 in real terms), there are risks around these specific numbers. Forecasts can be combined
with looking at longer run trends, developing scenarios analysis (e.g. worse case and best case
projections), with clients using sector specific knowledge, and in effect combining a top-down and bottom-
up approach. This can provide a more comprehensive picture of the future direction of consumption by
estimating a range of possible futures and the likelihood of each. Please contact us if you would like to
discuss this in more detail.
7
September 2009
2.1. Consumer Indicators at a Glance
UK: Claimant unemployment UK: House prices

Change on month (000s) % year
150 30
25
100 20
15 Nationwide
50 10
5
Halifax
0 0
-5
-50 Three month moving -10
average
Actual -15
-100 -20
1996 1998 2000 2002 2004 2006 2008 1996 1998 2000 2002 2004 2006 2008
Source: Haver Analytics Source: Haver Analytics
UK: Consumer confidence UK: Volume of retail sales

GfK NOP Index % 3m/year
10 15
Household
12 goods
0
9
-10
6
-20 3
Total sales
0
-30
-3
-40
-6
-50 -9
1996 1998 2000 2002 2004 2006 2008 1996 1998 2000 2002 2004 2006 2008
Source: Haver Analytics Source: Haver Analytics
UK: Purchasing managers survey UK: Lending to individuals

% balance* *value over 50 indicates % year
65 rising activity 20
Services business
18 Consumer credit
60 activity
16
55 14
12
50
10 Total lending
45
8
40 6
Manufacturing Secured lending
activity 4
35
2
30 0
1997 1999 2001 2003 2005 2007 2009 1996 1998 2000 2002 2004 2006 2008
Source: Haver Analytics/Markit Source: Haver Analytics
8
September 2009
2.2. Consumer Forecast at a Glance
UK: Consumer spending and income UK: Saving ratio and mortgage rate
% year
% %
10
Real disposable Forecast 14 F'cast 0
8 income Saving ratio -2
12
(LHS)
6 10 -4
4 -6
8
-8
2 6
-10
0 4
-12
Mortgage rate
-2 2 (RHS) -14
Consumer spending
-4 0 -16
-6 -2 -18
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012
UK: House prices and transactions UK: Unemployment and average earnings
000's % change % year % year
650 40 12 25
F'cast F'cast
600 House prices Unemployment
(RHS) 30 (LHS)
550 10 20
500 20
450 8 15
10
400
6 10
350 0
300 Average earnings
Housing turnover -10 4 5
250 (RHS)
(LHS)
200 -20 2 0
1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 1978 1984 1990 1996 2002 2008
UK: House price-income ratios UK: House prices

1995=100 % year
200 40
Forecast
Nominal
Relative to
180 disposable 30
income
160 20
140 10
120 0
Relative to F'cast
100 -10
employment Real
income
80 -20
1980 1984 1988 1992 1996 2000 2004 2008 2012 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011
9
September 2009
3. Forecast in Detail
3.1. Value of spending by category (£ billion)
Spending by Value
(£ billion) 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 784.1 817.0 859.2 890.6 869.6 871.2 891.4 931.4 987.9
Food 67.2 69.5 72.3 78.2 82.5 84.3 87.7 91.5 96.3
Sugar & confectionary 7.2 7.1 7.4 7.7 8.1 8.3 8.7 9.2 9.8
Soft drinks 8.3 8.8 8.9 8.9 8.9 9.2 9.6 10.1 10.6
Other food 51.7 53.6 56.1 61.6 65.5 66.7 69.3 72.1 75.7
Alcohol & tobacco 28.9 29.3 29.8 30.3 30.5 30.4 31.1 32.2 33.6
Alcohol 13.5 13.5 13.9 14.3 14.8 14.9 15.4 16.1 17.0
Tobacco 15.4 15.7 15.9 16.0 15.6 15.5 15.6 16.0 16.5
Clothing & footwear 43.5 44.5 45.6 46.1 41.8 39.8 39.4 40.0 41.7
Clothing 37.5 38.1 39.1 39.3 35.5 33.6 33.1 33.6 35.1
Footwear 6.0 6.4 6.5 6.8 6.4 6.2 6.3 6.4 6.7
Household & utility 149.3 160.8 171.7 185.0 196.2 202.2 210.1 219.6 230.9
Repair and maintenance goods 7.7 6.8 6.8 6.9 7.2 7.3 7.4 7.6 7.8
Repair and maintenance services 6.8 7.4 8.2 7.5 7.5 7.6 7.8 8.1 8.4
Fuel & power 21.5 26.6 27.0 32.6 38.1 35.6 35.5 36.0 37.2
Rents & water 113.3 120.1 129.8 138.0 144.5 151.5 158.8 166.8 176.2
Household goods, etc 44.5 45.2 46.2 45.8 44.8 44.3 45.4 47.4 50.2
Furniture 12.6 12.8 13.2 13.0 12.4 12.1 12.6 13.5 14.6
Floor coverings 4.1 4.2 4.4 4.2 4.1 4.1 4.2 4.4 4.7
Textiles 5.3 5.6 5.9 5.8 5.8 5.7 5.8 5.9 6.2
Major appliances 5.1 5.1 5.0 5.2 5.1 5.0 5.0 5.1 5.3
Small appliances 0.7 0.8 0.8 0.6 0.6 0.6 0.6 0.6 0.6
Hardware 4.4 4.5 4.5 4.5 4.2 4.2 4.3 4.5 4.7
Garden tools 4.2 4.6 5.1 5.2 5.3 5.4 5.5 5.7 6.1
Non-durable household goods 3.8 3.8 3.9 3.8 3.8 3.7 3.8 3.9 4.0
Services and repairs 4.2 3.9 3.5 3.5 3.6 3.5 3.6 3.8 4.0
Health 12.2 12.8 13.8 13.7 13.5 13.8 14.2 14.9 15.8
Medical products 4.4 4.5 4.7 5.1 5.1 5.2 5.3 5.6 5.9
Medical appliances 2.4 2.7 2.8 2.8 2.7 2.7 2.8 2.9 3.1
Medical services 5.4 5.6 6.3 5.8 5.8 5.9 6.1 6.5 6.8
Transport 116.2 119.9 130.5 134.9 120.7 118.0 119.7 124.2 130.6
Cars 36.7 37.2 40.2 37.9 31.8 29.2 28.2 28.4 29.1
Other vehicles 1.8 1.8 1.9 1.9 1.9 1.8 1.9 1.9 2.0
Operation of transport equipment 48.7 50.2 55.0 59.3 51.5 52.1 54.0 56.8 60.5
Spares 3.8 3.8 3.7 3.8 3.5 3.6 3.7 3.8 4.0
Petrol & oil 24.8 25.5 28.1 31.5 24.5 24.1 24.9 26.3 28.2
Repairs 15.3 15.7 18.0 18.3 17.4 18.0 18.7 19.6 20.7
Servicing 4.8 5.2 5.3 5.7 5.9 6.2 6.5 6.9 7.5
Travel 28.9 30.7 33.3 35.8 35.7 35.7 37.2 39.1 41.6
Rail 4.8 5.0 5.7 6.3 6.6 6.8 7.1 7.5 8.0
Road 7.9 8.4 8.9 8.6 8.6 8.7 9.3 9.9 10.7
Air 12.4 12.9 14.1 15.5 15.0 14.5 14.9 15.6 16.4
Other 3.9 4.4 4.6 5.5 5.6 5.8 6.0 6.3 6.6
Communications 17.9 18.3 18.5 18.7 18.3 18.1 18.3 18.9 19.7
Recreation & culture 90.2 93.6 99.1 102.0 94.6 93.0 94.1 100.0 108.4
Equipment 21.0 21.1 21.0 20.0 17.2 16.7 16.7 18.0 20.1
Audio-visual 5.1 5.5 6.1 5.6 4.8 4.6 4.5 4.8 5.3
Photographic & optical 4.2 4.2 3.4 3.4 3.0 2.8 2.8 3.1 3.6
IT 4.9 5.2 5.8 5.6 4.8 4.8 5.0 5.4 6.2
Recording media 6.5 6.1 5.7 5.4 4.5 4.3 4.3 4.3 4.4
Repairs 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Recreational services 27.4 28.8 31.1 33.5 30.9 30.6 31.8 34.2 37.3
Books, newspapers, etc 11.9 12.4 12.8 12.4 11.4 11.1 11.0 11.3 11.6
Books 3.4 3.5 3.6 3.3 3.1 3.1 3.2 3.4 3.5
Newspapers & magazines 4.4 4.4 4.5 4.3 3.9 3.8 3.7 3.8 3.9
Stationery 4.1 4.4 4.7 4.7 4.4 4.2 4.1 4.2 4.2
Other, inc package holidays 30.0 31.4 34.3 36.1 35.7 35.5 35.7 37.3 39.6
Education 11.1 11.8 12.4 12.6 12.8 13.4 14.2 15.3 16.7
Restaurants & hotels 85.5 87.6 90.8 94.0 93.4 94.1 97.3 102.9 110.4
Miscellaneous 105.9 112.4 116.3 115.7 109.5 109.6 111.9 116.5 123.6
Personal services 4.9 5.1 5.1 5.2 5.1 5.2 5.5 5.8 6.2
Personal elec. appliances 1.3 1.1 1.2 0.8 0.8 0.8 0.8 0.8 0.9
Articles for personal care 13.3 13.8 14.7 15.1 14.8 15.1 15.8 16.6 17.7
Personal effects 6.7 7.5 7.2 7.4 7.3 7.4 7.6 8.0 8.5
Financial services, etc 79.8 84.9 88.0 87.1 81.6 81.2 82.3 85.4 90.5
10
September 2009
3.2. Value of spending by category (% change)
Spending by Value
(% Year) 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 4.6 4.2 5.2 3.6 -2.4 0.2 2.3 4.5 6.1
Food 3.1 3.5 4.0 8.1 5.5 2.2 4.0 4.3 5.3
Sugar & confectionary -0.2 -0.7 3.1 4.5 5.1 3.2 4.8 5.6 6.3
Soft drinks 2.7 5.6 0.9 0.9 -0.2 2.9 4.3 5.0 5.9
Other food 3.6 3.7 4.7 9.7 6.4 1.9 3.9 4.1 5.0
Alcohol & tobacco 1.0 1.4 2.0 1.5 0.6 -0.3 2.2 3.7 4.3
Alcohol 1.5 0.4 2.9 2.7 3.7 0.1 3.5 4.9 5.4
Tobacco 0.5 2.2 1.2 0.4 -2.3 -0.7 0.9 2.5 3.1
Clothing & footwear 2.8 2.2 2.5 1.2 -9.4 -4.8 -1.1 1.5 4.4
Clothing 2.9 1.5 2.6 0.5 -9.9 -5.3 -1.4 1.4 4.5
Footwear 2.6 6.2 1.7 4.8 -6.4 -1.8 0.7 2.3 4.0
Repair and maintenance goods -2.9 -11.6 -0.9 2.5 3.9 0.8 1.6 2.3 2.9
Repair and maintenance services 8.0 8.7 10.7 -8.5 0.9 0.9 2.4 3.7 4.5
Fuel & power 22.0 24.0 1.4 20.5 16.9 -6.6 -0.2 1.5 3.2
Rents & water 5.6 6.0 8.1 6.3 4.7 4.9 4.8 5.1 5.6
Household goods, etc 2.3 1.7 2.2 -0.9 -2.3 -0.9 2.5 4.4 5.7
Furniture -0.2 1.2 3.4 -1.9 -4.4 -2.1 3.9 7.0 8.1
Floor coverings 0.3 1.5 5.4 -5.2 -2.5 -0.3 3.4 5.0 5.9
Textiles -3.8 6.7 5.9 -1.8 -1.2 -0.8 1.3 2.6 3.7
Major appliances 8.9 -1.2 -1.2 3.8 -1.7 -2.4 0.3 3.2 3.6
Small appliances -10.9 11.9 -8.3 -17.2 -8.8 -3.0 0.9 2.3 3.6
Hardware 10.2 0.9 0.3 1.4 -7.1 0.8 2.2 3.7 5.3
Garden tools 2.5 8.1 10.5 2.8 1.2 1.5 2.7 3.8 7.5
Non-durable household goods 1.5 1.0 0.3 -2.3 0.8 -1.9 2.4 2.2 3.0
Services and repairs 8.4 -7.0 -9.8 0.8 1.3 -0.6 2.7 4.0 6.0
Health 2.5 4.7 8.0 -0.5 -1.5 2.0 3.4 4.9 5.5
Medical products 2.5 2.4 5.6 8.4 -1.1 2.0 3.2 4.6 5.1
Medical appliances -4.5 11.4 3.4 -0.1 -3.8 1.3 3.1 4.7 5.1
Medical services 6.0 3.7 12.0 -7.5 -0.8 2.5 3.6 5.4 5.9
Transport 6.1 3.2 8.8 3.4 -10.5 -2.3 1.4 3.8 5.2
Cars 0.0 1.4 8.0 -5.8 -16.1 -8.3 -3.5 0.9 2.4
Other vehicles 5.8 -3.8 9.8 -1.1 -2.1 -2.2 0.8 2.4 3.9
Operation of transport equipment 10.5 3.0 9.7 7.7 -13.1 1.1 3.7 5.1 6.7
Spares 14.1 -0.6 -1.8 3.6 -7.5 2.3 2.8 3.2 4.1
Petrol & oil 9.7 3.1 10.0 12.1 -22.2 -1.5 3.4 5.5 7.1
Repairs 11.1 2.4 14.6 1.8 -5.0 3.8 3.9 4.5 5.7
Servicing 10.8 7.0 1.8 7.8 4.4 4.5 4.9 6.3 8.7
Travel 7.4 6.2 8.3 7.7 -0.2 0.0 4.1 5.2 6.2
Rail 5.3 3.8 14.0 9.5 5.8 2.9 4.8 4.8 6.3
Road 8.1 7.1 5.0 -2.8 -0.3 1.4 6.3 7.2 8.0
Air 7.9 4.3 9.2 10.0 -3.4 -3.2 2.7 4.7 5.7
Other 6.7 13.6 6.8 6.6 6.8 6.9 6.9 4.4 5.3
Communications 4.2 1.8 1.2 0.8 -1.9 -1.0 1.0 3.2 4.5
Recreation & culture 1.9 3.8 5.9 2.9 -7.3 -1.7 1.1 6.3 8.5
Equipment 2.0 0.6 -0.6 -4.5 -14.0 -3.3 0.2 8.1 11.6
Audio-visual 10.8 7.8 9.3 -6.9 -15.3 -4.4 -2.2 6.8 10.6
Photographic & optical 12.1 -1.9 -17.9 -1.3 -10.8 -6.6 -0.7 10.7 15.1
IT -4.5 6.5 9.7 -3.0 -14.0 0.1 3.0 9.8 13.3
Recording media -4.8 -7.3 -6.5 -5.4 -16.8 -3.1 -0.8 1.2 1.5
Repairs 12.5 -36.4 0.9 -28.0 -4.1 -1.7 0.0 4.4 5.8
Recreational services 2.9 5.1 8.1 7.8 -7.7 -0.9 3.7 7.7 9.1
Books, newspapers, etc 1.4 4.4 3.2 -3.3 -7.5 -2.8 -0.7 2.0 3.0
Books 1.4 2.9 3.2 -8.5 -5.8 0.4 2.8 4.6 5.5
Newspapers & magazines -3.4 0.7 1.0 -4.1 -9.2 -3.7 -2.0 1.7 3.5
Stationery 6.7 9.6 5.3 1.4 -7.2 -4.1 -1.8 0.5 1.1
Other, inc package holidays 1.3 4.7 9.3 5.3 -1.2 -0.5 0.6 4.6 6.0
Education 2.7 6.5 5.8 1.6 1.1 5.1 5.3 7.8 9.2
Restaurants & hotels 3.1 2.5 3.7 3.5 -0.6 0.8 3.3 5.8 7.3
Miscellaneous 7.4 6.2 3.5 -0.5 -5.3 0.1 2.1 4.2 6.1
Personal services 3.2 4.9 -0.9 2.8 -2.3 2.5 4.6 6.3 7.6
Personal elec. appliances -10.2 -15.7 14.1 -30.7 -7.4 1.8 2.6 3.1 3.8
Articles for personal care 2.3 4.0 6.8 2.5 -2.1 2.2 4.3 5.4 6.5
Personal effects -2.7 12.6 -3.6 2.4 -0.8 1.3 2.7 4.7 6.3
Financial services, etc 9.9 6.4 3.7 -1.0 -6.4 -0.5 1.5 3.7 6.0
11
September 2009
3.3. Consumer prices by category (2005=100)
Prices
(2005=100) 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 100.0 102.7 105.4 108.3 109.0 109.8 110.7 112.5 115.2
Food 100.0 102.3 107.0 116.6 126.7 129.1 131.6 134.2 137.7
Soft drinks 100.0 103.8 107.9 110.9 113.6 116.4 119.3 122.5 126.3
Other food 100.0 101.9 106.8 117.6 129.0 131.0 133.1 135.4 138.5
Alcohol & tobacco 100.0 101.5 103.8 106.8 113.2 116.0 118.9 122.1 125.8
Alcohol 100.0 98.3 98.5 101.4 110.6 112.4 114.2 116.2 118.8
Tobacco 100.0 104.3 109.0 112.2 115.4 119.4 123.5 128.1 133.1
Clothing 100.0 99.2 98.0 93.8 86.9 83.4 80.1 78.0 76.8
Footwear 100.0 98.6 99.7 99.3 97.8 96.5 95.2 94.4 93.8
Fuel & power 100.0 125.1 136.4 161.8 196.6 190.1 190.3 192.3 196.4
Rents & water 100.0 104.2 110.8 116.6 120.9 125.5 130.3 135.5 141.4
Furniture 100.0 102.3 106.7 111.8 115.5 119.3 123.4 127.7 133.0
Floor coverings 100.0 102.4 104.9 112.4 119.6 122.0 124.6 127.7 131.7
Textiles 100.0 97.9 97.0 96.8 96.5 96.5 96.6 96.7 96.9
Hardware 100.0 99.8 102.8 105.7 106.9 108.1 109.4 110.8 112.9
Garden tools 100.0 101.5 103.5 104.8 105.9 107.1 108.4 109.9 112.7
Health 100.0 101.3 103.8 105.2 106.7 108.1 109.8 111.5 113.8
Transport 100.0 101.9 104.3 108.9 104.5 104.5 104.6 105.8 107.8
Cars 100.0 97.0 97.5 94.5 85.5 81.5 78.4 77.5 77.2
Other vehicles 100.0 99.3 101.0 104.1 116.9 116.5 116.2 116.4 116.9
Spares 100.0 103.3 104.8 108.2 111.3 114.0 117.0 120.0 123.9
Petrol & oil 100.0 105.2 108.1 124.7 106.1 107.7 109.3 111.5 114.4
Repairs 100.0 106.9 113.0 119.9 126.0 132.6 137.3 142.4 148.2
Servicing 100.0 104.5 111.3 114.9 118.5 122.2 125.9 130.2 135.9
Travel 100.0 102.3 104.6 108.6 112.6 114.2 115.9 118.0 120.7
Rail 100.0 104.4 108.6 113.6 119.2 120.4 121.7 123.4 126.4
Road 100.0 103.4 108.3 113.0 117.6 122.5 127.5 133.0 139.4
Air 100.0 100.7 100.2 105.6 109.9 110.2 110.7 111.7 113.1
Other 100.0 102.5 107.6 105.3 106.2 107.2 108.1 109.3 111.1
Communications 100.0 99.5 95.5 92.5 90.9 89.4 87.7 86.6 86.1
Equipment 100.0 88.7 76.9 63.5 51.9 48.1 44.7 42.8 42.0
Audio-visual 100.0 88.8 79.5 69.9 60.4 54.9 50.0 46.9 45.5
IT 100.0 86.8 69.7 53.6 43.3 40.0 37.1 35.8 35.4
Recording media 100.0 99.3 100.8 97.4 84.3 83.3 82.4 81.7 81.0
Repairs 100.0 104.5 108.9 112.7 114.8 117.1 119.6 123.5 129.2
Books 100.0 104.8 110.0 117.9 120.1 124.0 128.1 132.9 138.5
Stationery 100.0 99.9 99.5 102.5 104.7 103.9 103.0 102.9 103.3
Education 100.0 105.6 113.5 121.0 126.5 131.7 137.1 145.0 155.1
Miscellaneous 100.0 103.8 107.3 104.4 101.2 101.9 102.8 104.6 107.3
12
September 2009
3.4. Consumer prices by category (% change)
Prices
(% Year) 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 2.3 2.7 2.6 2.7 0.7 0.7 0.8 1.6 2.4
Food 1.5 2.3 4.6 8.9 8.7 1.9 1.9 2.0 2.6
Soft drinks 0.3 3.8 4.0 2.8 2.5 2.4 2.5 2.7 3.1
Other food 1.5 1.9 4.8 10.1 9.7 1.6 1.6 1.7 2.3
Alcohol & tobacco 1.2 1.4 2.3 2.9 6.0 2.5 2.5 2.7 3.0
Alcohol -1.5 -1.7 0.3 2.9 9.1 1.6 1.6 1.8 2.2
Tobacco 3.7 4.3 4.5 2.9 2.9 3.4 3.5 3.7 3.9
Clothing & footwear -2.2 -0.9 -0.9 -3.7 -6.5 -3.7 -3.5 -2.5 -1.4
Clothing -2.2 -0.8 -1.2 -4.3 -7.3 -4.1 -3.9 -2.7 -1.5
Footwear -2.4 -1.4 1.2 -0.5 -1.5 -1.3 -1.3 -0.9 -0.6
Fuel & power 13.4 25.1 9.1 18.6 21.5 -3.3 0.1 1.1 2.1
Rents & water 4.7 4.2 6.4 5.2 3.7 3.8 3.8 4.0 4.4
Furniture 3.0 2.3 4.3 4.8 3.3 3.3 3.4 3.5 4.1
Floor coverings 2.4 2.4 2.5 7.1 6.5 2.0 2.1 2.5 3.1
Textiles -2.2 -2.1 -0.9 -0.2 -0.3 0.0 0.1 0.1 0.2
Major appliances -2.1 -2.9 2.5 0.9 3.6 -1.0 -0.9 0.2 1.1
Small appliances -2.2 -2.9 2.4 0.8 2.9 -1.2 -0.9 0.2 1.1
Hardware -2.1 -0.2 3.1 2.8 1.1 1.1 1.2 1.3 1.9
Garden tools -1.7 1.5 1.9 1.2 1.1 1.1 1.2 1.4 2.6
Health 0.9 1.3 2.5 1.3 1.4 1.4 1.5 1.6 2.0
Medical products -0.9 -0.4 1.5 1.8 1.1 1.2 1.2 1.4 1.8
Medical appliances 1.2 -0.5 1.8 1.6 1.4 1.4 1.5 1.6 1.8
Transport 2.4 1.9 2.4 4.4 -4.1 0.0 0.1 1.2 1.8
Cars -3.8 -3.0 0.5 -3.1 -9.5 -4.7 -3.8 -1.2 -0.4
Other vehicles -2.2 -0.7 1.7 3.1 12.3 -0.3 -0.3 0.2 0.4
Operation of transport equipment 7.5 5.5 4.1 10.2 -5.5 2.9 2.4 2.7 3.3
Spares 3.0 3.3 1.4 3.3 2.8 2.5 2.6 2.6 3.2
Petrol & oil 8.6 5.2 2.8 15.3 -14.9 1.5 1.5 2.0 2.6
Repairs 7.3 6.9 5.7 6.1 5.1 5.3 3.5 3.7 4.1
Servicing 6.5 4.5 6.5 3.3 3.1 3.1 3.1 3.4 4.4
Travel 3.0 2.3 2.3 3.8 3.7 1.4 1.5 1.8 2.3
Rail 4.8 4.4 4.0 4.7 4.9 1.0 1.1 1.4 2.4
Road 6.3 3.4 4.7 4.4 4.1 4.1 4.1 4.3 4.8
Air 1.4 0.7 -0.5 5.4 4.1 0.3 0.4 0.9 1.3
Other -0.5 2.5 4.9 -2.1 0.8 0.9 0.9 1.1 1.6
Communications -2.5 -0.5 -4.0 -3.2 -1.7 -1.7 -1.8 -1.3 -0.6
Recreation & culture -2.3 -1.3 -2.0 -3.2 -5.5 -1.8 -1.8 -0.5 0.8
Equipment -12.6 -11.3 -13.3 -17.4 -18.3 -7.3 -7.0 -4.4 -1.8
Audio-visual -11.4 -11.2 -10.4 -12.1 -13.6 -9.2 -8.9 -6.2 -3.0
Photographic & optical -18.7 -22.3 -23.6 -24.9 -24.2 -8.8 -8.2 -5.3 -2.1
IT -19.8 -13.2 -19.7 -23.1 -19.3 -7.6 -7.1 -3.7 -1.1
Recording media -2.7 -0.7 1.5 -3.4 -13.5 -1.1 -1.1 -0.9 -0.8
Repairs 6.7 4.5 4.2 3.5 1.9 2.0 2.1 3.3 4.6
Books 1.8 4.8 5.0 7.1 1.9 3.2 3.3 3.8 4.2
Stationery -1.3 -0.1 -0.4 3.0 2.2 -0.8 -0.8 -0.1 0.4
Other, inc package holidays -0.6 -1.0 0.0 0.2 -0.7 -0.7 -0.6 0.2 0.8
Education 4.9 5.6 7.4 6.7 4.5 4.1 4.1 5.8 6.9
Miscellaneous 3.7 3.8 3.3 -2.7 -3.0 0.7 0.9 1.7 2.6
Articles for personal care -0.9 -3.3 2.8 0.8 2.2 2.3 2.3 2.4 2.4
Financial services, etc 4.7 5.0 3.4 -4.3 -4.8 0.2 0.4 1.4 2.6
13
September 2009
3.5. Volume of spending by category (£2005 billion)
Spending by Volume
(2005£ billions) 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 784.1 795.6 815.2 822.7 797.9 793.5 805.5 828.2 857.7
Food 67.1 67.9 67.6 67.1 65.1 65.3 66.6 68.1 69.9
Soft drinks 8.3 8.5 8.2 8.1 7.8 7.9 8.0 8.2 8.4
Other food 51.6 52.6 52.5 52.3 50.8 50.9 52.0 53.2 54.6
Alcohol & tobacco 28.9 28.8 28.7 28.4 26.9 26.2 26.1 26.4 26.7
Alcohol 13.5 13.8 14.1 14.1 13.4 13.2 13.5 13.9 14.3
Tobacco 15.4 15.1 14.6 14.2 13.5 13.0 12.6 12.5 12.4
Clothing 37.5 38.4 39.9 41.9 40.8 40.3 41.3 43.1 45.7
Footwear 6.0 6.5 6.5 6.8 6.5 6.5 6.6 6.8 7.1
Fuel & power 21.5 21.3 19.8 20.1 19.4 18.7 18.7 18.7 18.9
Rents & water 113.3 115.3 117.2 118.4 119.5 120.8 121.9 123.2 124.6
Furniture 12.6 12.5 12.4 11.6 10.7 10.2 10.2 10.6 11.0
Floor coverings 4.1 4.1 4.2 3.7 3.4 3.3 3.4 3.5 3.6
Textiles 5.2 5.7 6.1 6.0 6.0 5.9 6.0 6.1 6.4
Hardware 4.4 4.5 4.3 4.3 3.9 3.9 4.0 4.1 4.2
Garden tools 4.2 4.5 4.9 5.0 5.0 5.0 5.1 5.2 5.4
Health 12.2 12.6 13.3 13.0 12.7 12.7 13.0 13.4 13.9
Transport 116.2 117.7 125.1 123.9 115.6 112.9 114.4 117.3 121.2
Cars 36.7 38.4 41.3 40.1 37.2 35.8 35.9 36.6 37.7
Other vehicles 1.8 1.8 1.9 1.8 1.6 1.6 1.6 1.6 1.7
Spares 3.8 3.6 3.5 3.5 3.2 3.2 3.2 3.2 3.2
Petrol & oil 24.7 24.2 25.9 25.2 23.0 22.4 22.8 23.6 24.6
Repairs 15.3 14.7 15.9 15.3 13.8 13.6 13.7 13.8 14.0
Servicing 4.8 5.0 4.7 5.0 5.0 5.1 5.2 5.3 5.5
Travel 28.9 30.1 31.8 33.0 31.7 31.3 32.1 33.2 34.5
Rail 4.8 4.8 5.3 5.5 5.6 5.7 5.9 6.1 6.3
Road 7.9 8.2 8.2 7.6 7.3 7.1 7.3 7.5 7.7
Air 12.4 12.8 14.0 14.7 13.6 13.1 13.4 13.9 14.5
Other 3.9 4.3 4.3 5.2 5.3 5.4 5.5 5.7 5.9
Communications 17.9 18.4 19.4 20.2 20.1 20.3 20.8 21.8 22.9
Equipment 20.9 23.7 27.2 31.5 33.1 34.5 37.2 42.1 47.8
Audio-visual 5.1 6.2 7.6 8.0 7.9 8.3 8.9 10.1 11.5
IT 4.9 6.0 8.2 10.4 11.1 12.0 13.3 15.1 17.3
Recording media 6.5 6.1 5.6 5.5 5.3 5.2 5.2 5.3 5.4
Repairs 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Books 3.4 3.3 3.3 2.8 2.6 2.5 2.5 2.5 2.6
Stationery 4.1 4.4 4.7 4.6 4.2 4.1 4.0 4.1 4.1
Education 11.1 11.1 11.0 10.5 10.1 10.2 10.3 10.5 10.7
Miscellaneous 105.9 108.3 108.5 110.9 108.2 107.6 108.8 111.5 115.3
14
September 2009
3.6. Volume of spending by category (% change)
Spending by Volume
(% year) 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 2.3 1.5 2.5 0.9 -3.0 -0.5 1.5 2.8 3.6
Food 1.5 1.2 -0.5 -0.8 -2.9 0.3 2.1 2.3 2.6
Sugar & confectionary -3.0 -4.4 -0.8 -2.5 -2.8 -0.1 1.4 2.0 2.3
Soft drinks 2.4 1.8 -3.0 -1.9 -2.6 0.5 1.8 2.2 2.7
Other food 2.1 1.8 -0.1 -0.3 -3.0 0.3 2.2 2.3 2.6
Alcohol & tobacco -0.2 0.0 -0.3 -1.4 -5.0 -2.7 -0.3 1.0 1.3
Alcohol 3.1 2.2 2.6 -0.2 -4.9 -1.4 1.9 3.0 3.2
Tobacco -3.2 -2.0 -3.1 -2.5 -5.1 -4.0 -2.6 -1.2 -0.8
Clothing & footwear 5.2 3.1 3.4 5.1 -3.1 -1.1 2.5 4.1 5.9
Clothing 5.2 2.3 3.8 5.1 -2.8 -1.2 2.6 4.3 6.1
Footwear 5.2 7.7 0.5 5.3 -5.0 -0.5 2.0 3.2 4.6
Repair and maintenance goods -3.6 -12.4 -4.9 -3.4 -1.9 -1.6 -1.0 -0.8 -0.6
Repair and maintenance services 2.4 3.7 5.2 -12.8 -1.7 -1.4 0.1 0.7 1.2
Fuel & power 7.6 -0.8 -7.0 1.6 -3.8 -3.4 -0.3 0.4 1.1
Rents & water 0.9 1.7 1.6 1.0 1.0 1.0 1.0 1.0 1.2
Household goods, etc 1.7 0.7 -0.4 -3.7 -5.1 -2.3 1.0 2.5 3.3
Furniture -3.1 -1.1 -0.9 -6.4 -7.5 -5.2 0.4 3.4 3.8
Floor coverings -2.1 -0.8 2.9 -11.5 -8.4 -2.3 1.3 2.5 2.7
Textiles -1.6 9.0 6.9 -1.6 -0.9 -0.8 1.2 2.5 3.5
Major appliances 11.2 1.8 -3.6 2.9 -5.1 -1.5 1.2 2.9 2.5
Small appliances -8.9 15.2 -10.4 -17.9 -11.4 -1.8 1.8 2.1 2.5
Hardware 12.5 1.1 -2.7 -1.4 -8.1 -0.3 1.0 2.3 3.3
Garden tools 4.2 6.5 8.4 1.5 0.1 0.4 1.5 2.4 4.7
Non-durable household goods 1.5 -2.3 -1.9 -5.1 -5.1 -3.1 1.0 0.7 1.2
Services and repairs 2.7 -10.7 -13.9 -3.9 -2.9 -2.7 0.4 1.5 2.8
Health 1.7 3.4 5.4 -1.8 -2.9 0.6 1.9 3.3 3.4
Medical products 3.4 2.8 4.1 6.5 -2.2 0.8 2.0 3.2 3.3
Medical appliances -5.6 12.0 1.6 -1.6 -5.2 -0.1 1.6 3.1 3.2
Medical services 3.8 0.0 8.3 -8.6 -2.3 0.8 1.9 3.5 3.6
Transport 3.7 1.3 6.3 -1.0 -6.8 -2.3 1.3 2.5 3.3
Cars 4.0 4.5 7.5 -2.8 -7.4 -3.7 0.3 2.1 2.9
Other vehicles 8.2 -3.2 8.0 -4.1 -12.8 -1.9 1.1 2.2 3.5
Operation of transport equipment 2.9 -2.4 5.5 -2.3 -8.0 -1.8 1.3 2.3 3.2
Spares 10.8 -3.8 -3.2 0.3 -10.0 -0.2 0.2 0.6 0.9
Petrol & oil 1.0 -2.0 6.9 -2.8 -8.6 -2.9 1.9 3.4 4.4
Repairs 3.6 -4.2 8.5 -4.1 -9.6 -1.4 0.4 0.7 1.5
Servicing 4.0 2.4 -4.4 4.4 1.3 1.3 1.7 2.8 4.1
Travel 4.2 3.8 5.8 3.7 -3.8 -1.4 2.6 3.4 3.8
Rail 0.5 -0.5 9.6 4.6 0.8 1.9 3.7 3.4 3.8
Road 1.7 3.5 0.3 -6.9 -4.2 -2.6 2.2 2.7 3.1
Air 6.4 3.6 9.7 4.4 -7.2 -3.5 2.3 3.8 4.3
Other 7.2 10.8 0.5 20.4 1.7 2.2 2.8 3.3 3.7
Communications 6.8 2.3 5.5 4.2 -0.2 0.7 2.8 4.6 5.2
Recreation & culture 4.4 5.2 8.1 6.3 -1.9 0.1 3.0 6.8 7.6
Equipment 16.7 13.4 14.7 15.6 5.2 4.4 7.7 13.0 13.7
Audio-visual 25.2 21.4 22.1 6.0 -2.0 5.3 7.4 13.8 14.0
IT 19.1 22.7 36.5 26.2 6.6 8.3 10.9 14.0 14.5
Recording media -2.1 -6.7 -7.9 -2.0 -3.8 -2.0 0.3 2.1 2.3
Repairs 5.4 -39.1 -3.2 -30.4 -5.9 -3.6 -2.0 1.0 1.1
Recreational services -0.7 0.3 4.1 4.8 -8.2 -3.4 1.0 3.9 4.4
Books, newspapers, etc 0.6 0.7 0.8 -7.4 -9.8 -4.0 -2.0 0.0 0.4
Books -0.4 -1.8 -1.7 -14.6 -7.6 -2.7 -0.5 0.8 1.2
Newspapers & magazines -4.8 -5.5 -2.6 -8.6 -12.1 -6.0 -4.4 -1.6 -0.6
Stationery 8.1 9.7 5.8 -1.5 -9.2 -3.3 -1.0 0.6 0.7
Other, inc package holidays 1.9 5.8 9.3 5.1 -0.5 0.2 1.2 4.4 5.1
Education -2.1 0.8 -1.6 -4.7 -3.3 1.0 1.2 1.9 2.2
Restaurants & hotels -0.5 -1.2 0.1 -0.6 -3.6 -1.2 1.3 2.0 3.1
Miscellaneous 3.6 2.3 0.1 2.2 -2.4 -0.6 1.2 2.4 3.4
Personal services -1.4 1.2 -4.5 -1.1 -5.2 -0.7 1.4 2.7 3.7
Personal elec. appliances -14.2 -17.8 10.5 -32.1 -9.4 -0.4 0.3 0.6 0.8
Articles for personal care 3.3 7.6 3.8 1.7 -4.2 -0.1 2.0 2.9 4.0
Personal effects -3.8 7.7 -7.5 -3.4 -5.1 -0.2 1.1 2.6 3.6
Financial services, etc 4.9 1.4 0.3 3.4 -1.6 -0.7 1.0 2.3 3.3
15
September 2009
3.7. Spending shares by value
Spending Shares by Value

(%) 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Food 8.56 8.51 8.42 8.78 9.48 9.67 9.83 9.82 9.75
Soft drinks 1.06 1.07 1.03 1.00 1.03 1.05 1.07 1.08 1.08
Other food 6.59 6.56 6.53 6.91 7.53 7.66 7.78 7.74 7.67
Alcohol & tobacco 3.68 3.58 3.47 3.40 3.50 3.49 3.48 3.46 3.40
Alcohol 1.72 1.66 1.62 1.61 1.71 1.71 1.73 1.73 1.72
Tobacco 1.96 1.92 1.85 1.79 1.79 1.78 1.75 1.72 1.67
Clothing 4.79 4.67 4.55 4.42 4.08 3.86 3.71 3.61 3.55
Footwear 0.77 0.78 0.75 0.76 0.73 0.72 0.71 0.69 0.68
Fuel & power 2.74 3.26 3.14 3.66 4.38 4.08 3.98 3.87 3.76
Rents & water 14.45 14.70 15.11 15.49 16.61 17.39 17.81 17.91 17.84
Furniture 1.61 1.57 1.54 1.46 1.43 1.39 1.41 1.45 1.48
Floor coverings 0.53 0.51 0.51 0.47 0.47 0.47 0.47 0.47 0.47
Textiles 0.67 0.69 0.69 0.65 0.66 0.66 0.65 0.64 0.62
Hardware 0.56 0.55 0.52 0.51 0.48 0.49 0.49 0.48 0.48
Garden tools 0.54 0.56 0.59 0.59 0.61 0.61 0.62 0.61 0.62
Health 1.55 1.56 1.60 1.54 1.55 1.58 1.60 1.60 1.59
Transport 14.82 14.68 15.18 15.15 13.88 13.54 13.42 13.33 13.22
Cars 4.68 4.56 4.68 4.26 3.66 3.35 3.16 3.05 2.94
Other vehicles 0.23 0.22 0.23 0.22 0.22 0.21 0.21 0.20 0.20
Spares 0.48 0.46 0.43 0.43 0.41 0.42 0.42 0.41 0.41
Petrol & oil 3.16 3.12 3.27 3.53 2.81 2.77 2.80 2.82 2.85
Repairs 1.95 1.92 2.09 2.06 2.00 2.07 2.10 2.10 2.10
Servicing 0.62 0.64 0.61 0.64 0.68 0.71 0.73 0.74 0.76
Travel 3.69 3.76 3.87 4.02 4.11 4.10 4.17 4.20 4.21
Rail 0.62 0.61 0.67 0.70 0.76 0.78 0.80 0.80 0.81
Road 1.01 1.03 1.03 0.97 0.99 1.00 1.04 1.07 1.08
Air 1.58 1.58 1.64 1.74 1.72 1.66 1.67 1.67 1.66
Other 0.49 0.54 0.54 0.61 0.64 0.66 0.67 0.67 0.67
Communications 2.29 2.24 2.15 2.09 2.10 2.08 2.05 2.03 2.00
Equipment 2.68 2.58 2.44 2.25 1.98 1.91 1.87 1.94 2.04
Audio-visual 0.65 0.68 0.70 0.63 0.55 0.52 0.50 0.51 0.53
IT 0.63 0.64 0.67 0.63 0.55 0.55 0.56 0.58 0.62
Recording media 0.83 0.74 0.66 0.60 0.51 0.50 0.48 0.47 0.45
Repairs 0.02 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01
Books 0.43 0.43 0.42 0.37 0.36 0.36 0.36 0.36 0.36
Stationery 0.52 0.54 0.54 0.53 0.51 0.48 0.47 0.45 0.43
Education 1.41 1.44 1.45 1.42 1.47 1.54 1.59 1.64 1.69
Miscellaneous 13.50 13.76 13.53 12.99 12.59 12.58 12.55 12.51 12.52
16
September 2009
3.8. Spending shares by volume
Spending Shares by Volume

(%) 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Food 8.56 8.54 8.29 8.15 8.16 8.22 8.27 8.23 8.15
Soft drinks 1.06 1.06 1.01 0.98 0.98 0.99 1.00 0.99 0.98
Other food 6.59 6.61 6.44 6.36 6.36 6.42 6.46 6.43 6.37
Alcohol & tobacco 3.68 3.63 3.53 3.45 3.37 3.30 3.24 3.19 3.12
Alcohol 1.72 1.73 1.73 1.72 1.68 1.67 1.67 1.68 1.67
Tobacco 1.96 1.89 1.79 1.73 1.69 1.64 1.57 1.51 1.45
Clothing 4.79 4.83 4.89 5.09 5.11 5.07 5.13 5.20 5.33
Footwear 0.77 0.81 0.80 0.83 0.82 0.82 0.82 0.82 0.83
Fuel & power 2.74 2.68 2.43 2.45 2.43 2.36 2.32 2.26 2.21
Rents & water 14.45 14.49 14.38 14.39 14.98 15.22 15.14 14.87 14.53
Furniture 1.61 1.57 1.52 1.41 1.35 1.28 1.27 1.28 1.28
Floor coverings 0.53 0.51 0.52 0.45 0.43 0.42 0.42 0.42 0.41
Textiles 0.67 0.72 0.75 0.73 0.75 0.75 0.74 0.74 0.74
Hardware 0.56 0.56 0.53 0.52 0.49 0.49 0.49 0.49 0.49
Garden tools 0.54 0.57 0.60 0.60 0.62 0.63 0.63 0.63 0.63
Health 1.55 1.58 1.63 1.58 1.59 1.60 1.61 1.62 1.61
Transport 14.82 14.80 15.35 15.06 14.48 14.23 14.20 14.17 14.13
Cars 4.68 4.82 5.06 4.88 4.66 4.51 4.46 4.42 4.39
Other vehicles 0.23 0.22 0.24 0.22 0.20 0.20 0.20 0.20 0.20
Spares 0.48 0.46 0.43 0.43 0.40 0.40 0.40 0.39 0.38
Petrol & oil 3.15 3.05 3.18 3.06 2.89 2.82 2.83 2.85 2.87
Repairs 1.95 1.84 1.95 1.86 1.73 1.71 1.70 1.66 1.63
Servicing 0.62 0.62 0.58 0.60 0.63 0.64 0.64 0.64 0.65
Travel 3.69 3.78 3.90 4.01 3.98 3.94 3.99 4.01 4.02
Rail 0.62 0.60 0.65 0.67 0.70 0.71 0.73 0.73 0.73
Road 1.01 1.03 1.00 0.93 0.91 0.90 0.90 0.90 0.90
Air 1.58 1.61 1.72 1.78 1.71 1.66 1.67 1.68 1.70
Other 0.49 0.54 0.53 0.63 0.66 0.68 0.69 0.69 0.69
Communications 2.29 2.31 2.38 2.45 2.52 2.55 2.59 2.63 2.67
Equipment 2.67 2.98 3.34 3.82 4.15 4.35 4.62 5.08 5.58
Audio-visual 0.65 0.78 0.93 0.97 0.99 1.04 1.10 1.22 1.35
IT 0.63 0.76 1.01 1.26 1.39 1.51 1.65 1.83 2.02
Recording media 0.83 0.77 0.69 0.67 0.66 0.65 0.65 0.64 0.63
Repairs 0.02 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01
Books 0.43 0.42 0.40 0.34 0.32 0.32 0.31 0.30 0.30
Stationery 0.52 0.56 0.58 0.56 0.53 0.51 0.50 0.49 0.48
Education 1.41 1.40 1.35 1.27 1.27 1.29 1.28 1.27 1.25
Miscellaneous 13.51 13.62 13.31 13.48 13.56 13.56 13.51 13.46 13.44
17
September 2009
4. Charts
4.1. Value of spending by category (% change)
Motor vehicles and other vehicles Household goods

Values, Annual % change Values, Annual % change
40 30
Cars
30 Other Vehicles 20
20 10
10 0
0 -10
Furniture
-10 -20 Carpets
Major Appliances
-20 -30
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Recreation and restaurants Food, alcohol & tobacco

25 20
Recreation Equipment
20 Recreation Services Food
16 Alcohol
Hotels & Restaurants
15 Tobacco
12
10
5 8
c
0
4
-5
0
-10
-15 -4
-20 -8
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Clothing and rent Transport, communications and health

25
15
Clothing
Transport Services
Rents & Water 20
10 Communications
Health
15
5
10
0
5
-5 0
-10 -5
-15 -10
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
18
September 2009
4.2. Consumer prices by category (% change)

Prices, Annual % change Prices, Annual % change
20 16
Cars Furniture
15 12 Carpets
Other Vehicles
Major Appliances
8
10
4
5
0
0
-4
-5
-8
-10 -12
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

15
Recreation Equipment 16
10 Recreation Services
Hotels & Restaurants Food
5 12 Alcohol
Tobacco
0 8
-5
4
-10
0
-15
-20 -4
-25 -8
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

20 20
Transport Services
Clothing Communications
16 16
Rents & Water Health
12 12
8
8
4
4
0
0
-4
-4 -8
-8 -12
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
19
September 2009
4.3. Volumes of spending by category (% change)

Volumes, Annual % change Volumes, Annual % change
40 35 Furniture
30 Carpets
Cars
30 Major Appliances
Other Vehicles 25
20
20 15
10
10
5
0
0
-5
-10 -10
-15
-20 -20
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

50 20
Recreation Equipment Food
45
Recreation Services Alcohol
40 15 Tobacco
Hotels & Restaurants
35
10
30
25 5
20
15 0
10
5 -5
0
-10
-5
-10 -15
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

18 25
Clothing Transport Services
15
20 Communications
Rents & Water
12 Health
9 15
6
10
3
5
0
-3 0
-6
-5
-9
-12 -10
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
20
September 2009
5. Consumer Spending by Category: the Modelling

Framework
The forecasts in this document have been produced on Oxford Economics Consumer Spending Model,
which produces quarterly forecasts for a large number of components of UK consumer spending, as used
by the ONS for classifying consumption data. The model is designed as an additional component of
Oxford’s UK sectoral model, which enables us to use detailed sectoral projections to explain prices for the
various components of consumption in terms of disaggregated producer and import price forecasts. This
has been done by using input-output tables to estimate the appropriate weights for import prices and for
adding different industries together where more than one industry’s prices are likely to be relevant for a
given consumption category, and then estimating econometrically the relationship between this “cost”
variable and the actual price data.
In addition to price equations, the model contains share equations for each category of consumption.
These operate “top-down”. In other words, the share equations for the main COICOP categories are
defined as shares of total consumption, while the more detailed components are estimated as shares of
the relevant main component.
The final forecasts for consumption (which, like the share equations, are defined in constant-price terms)
are produced by applying the shares to the forecast for the appropriate aggregate and constraining the
component forecasts to ensure that they add up to the total. Current price forecasts, giving the expected
value of each product market, are obtained by multiplying together the price and volume forecasts.
Forecasts for Consumption by Census Output Area: Oxford have also developed a model to derive
estimates of disaggregated annual consumption by Census Output Area (of which there are some
200,000). But in this case we have drawn upon data from the Family Expenditure Survey about how
spending patterns vary across different types of household. On the basis of population and employment
inferred from the Census estimates of incomes by occupation, and consumption shares derived from the
FES, the model generates projections for a wide range of components of personal spending, including
convenience and comparison goods.
Further details are obtainable from:
Oxford Economics
121, St Aldates, Oxford, OX1 1HB
℡: 01865 268900, : 01865 268906
: www.oxfordeconomics.com
Email: hmehta@oxfordeconomics.com
21

Consumer Outlook: September 2009

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Consumer Outlook: September 2009

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Consumer Outlook

(Annual percentage changes, unless otherwise specified)

2005 2006 2007 2008 2009 2010 2011 2012 2013

UK: Personal sector saving UK: Government expenditure and receipts

UK: Unemployment and the NAIRU UK: Inflation relative to target

Real Annual Growth (2005 prices, % year)

A note on using the forecasts

2.1. Consumer Indicators at a Glance

UK: Claimant unemployment UK: House prices

UK: Consumer confidence UK: Volume of retail sales

UK: Purchasing managers survey UK: Lending to individuals

2.2. Consumer Forecast at a Glance

UK: House price-income ratios UK: House prices

3.2. Value of spending by category (% change)

3.3. Consumer prices by category (2005=100)

3.4. Consumer prices by category (% change)

3.5. Volume of spending by category (£2005 billion)

3.6. Volume of spending by category (% change)

3.7. Spending shares by value

Spending Shares by Value

3.8. Spending shares by volume

Spending Shares by Volume

4.1. Value of spending by category (% change)

Motor vehicles and other vehicles Household goods

Recreation and restaurants Food, alcohol & tobacco

Clothing and rent Transport, communications and health

4.2. Consumer prices by category (% change)

Motor vehicles and other vehicles Household goods

Recreation and restaurants Food, alcohol & tobacco

Clothing and rent Transport, communications and health

4.3. Volumes of spending by category (% change)

Motor vehicles and other vehicles Household goods

Recreation and restaurants Food, alcohol & tobacco

Clothing and rent Transport, communications and health

5. Consumer Spending by Category: the Modelling

Further details are obtainable from:

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