UK's wealthy households plan to increase luxury spending

The UK’s wealthiest households are preparing to spend more on luxury items, cars, and technology. A report from GfK indicates that lower interest rates are making consumers more willing to spend. Households earning £50,000 ($65,000) or more plan to increase their big-ticket purchases. The GfK report shows a significant rise in spending intentions, reaching a score of 4, up from -22 last year. This suggests a shift in consumer confidence among high earners. Neil Bellamy, director at NIQ GfK, noted that the drop in interest rates is positively affecting savings. Wealthy consumers feel more optimistic about their spending habits compared to a year ago. Despite this uptick among the affluent, many households are still saving. GfK's overall major purchases index remained steady, and savings intentions across different income levels dropped significantly. This drop may be due to rising costs, especially for lower-income families. Starting in April, many Britons will see a £600 increase in expenses due to rising water and energy bills. Additionally, the poorest households will face cuts to welfare benefits announced in the upcoming spring fiscal statement. While consumer confidence has improved slightly, it is still below levels seen before the Labour government’s tax warnings last year. The Bank of England has decided to keep interest rates steady at 4.5%, making future financial comfort uncertain. Bellamy cautioned that any disruption could negatively affect consumer sentiment.