Amid the unfolding events in the international scene, British rese are well advised to dig deep in their trenches as things are expected to turn for the worse before we can ever hope of better things to come. The volatility in North Africa and the Middle East coupled by the soaring prices of commodities has hit us right on the gut. What is most disconcerting is the fact that the Bank England cannot seem to take any substantial action and come to our rescue like it did during 2008 and 2009. In fact, it is becoming more of a problem for most people within the United Kingdom. Economic experts and financial analysts are expecting significant spikes in the application for payday loans and other similar personal loans as consumers try to cope with a very tight economic situation.

Personal Consumption is in Doldrums

We only need to look at how consumers are going this time of the year in order for us to get a real grip of the situation. Life for most Brits is running beyond their means. Prices of basic commodities have risen to levels that personal incomes can no longer cope up with them. In fact, retailers are now feeling the pinch as it is now difficult to sell even the cheap commodities.  In a recent statement, retail chain Primark has reported a marked decline in their sales since last December. Consumers are getting boxed-in by negative variables and most of them are taking a cautious stance in their spending. The most recent market reports indicate that this downtrend in consumer demand is actually felt in both ends of the market spectrum as John Lewis is also going through tough times.

Slowdown in Consumer Spending is far from Being a Temporary Hiccup

So, how do we explain this current entanglement that Brits find themselves in at the moment? Modern day prophets of doom refer to it as the part of the economic diaspora. This pervading fear of an impending cut has brought about a strong sense of fear and lack of confidence among consumers. The situation is a result of the interplay of a lot of leading and concurrent variables. Of course, we can blame the turbulent events in the Middle East and North Africa which have pushed fuel prices to their 2-year highs.

However, when it comes down to the gut issues that really affect the spending behavior of Brits, we don’t have to go far. It is all about the amount of money or disposable income of consumers. Prevailing wage levels are not able to match the increase in the cost of living. Consumers simply don’t have enough money to spend and, sadly, there is no indication that things could turn for the better in the near future.