Consumers in the UK are still performing well. While the Bank of England's rapid rate hike could lead to an economic recession, we need to keep an eye on consumer spending since the UK is a consumer-driven economy. Observing the performance of companies can give us a more timely look into consumer behaviour. According to the latest data, consumers are doing quite well. For example, the latest financial results of Sainsbury, the UK's second-largest supermarket chain, showed that excluding petrol sales, its sales revenue was up nearly 10% year-on-year and the company was expected to reach market expectations. Furthermore, people are not cutting back on vacation spending and airlines are still performing well. For instance, despite the impact of the air traffic controllers' strike, Ryanair and Wizz Air set records for passenger numbers in June. These news may be surprising, but on average, the resilience of consumers is reasonably explainable. In the past period, the rise in deposit interest has been significantly higher than the rise in mortgage rates, and the growth rate of savings interest has been even faster, which has helped to increase overall consumer income. Moreover, employment wages are rising and the cost of living is also beginning to ease, such as domestic energy bills starting to go down, petrol prices falling, and food and essential prices also declining. Therefore, for the Bank of England, the main task at the moment is to emphasise that rates will remain high in the long run, and to get the markets and consumers out of the idea that a rate rise will inevitably lead to a recession, followed by an overcompensating rate cut. Additionally, the government has planned to cut tax breaks for savings and investments, so income for savers and investors may be reduced. For savers, it should be considered to save in a tax-free manner in a personal savings account (ISA). These are the main points for today's UK economy and finance.
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