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Secondly, budget airline easyJet noted in its recent results that once travel restrictions had been lifted to the Canary Islands, it saw huge demand for flights. There is a hidden demand to get away and have fun again.
House prices are at record highs and home sales booming (albeit helped by a stamp duty cut from the Chancellor). Car registrations for October were flat on last year’s levels but private sales to households were actually marginally higher.
And another expensive item — furniture — has seen a massive increase in sales, according to the most recent Bank of England report. Purchases of big-ticket items such as homes, cars and furniture require some degree of consumer confidence.
A spending spree would be fabulous for GDP as so much of the economy is dependent on consumer spending — about 70 per cent.
Of course, for many households, the past eight months have been catastrophic financially. But for those in safe and secure jobs, still earning a wage, their finances may have never looked so good.
Of course, much depends on the coming months: if we get a vaccine in the next half year; if the extension of the furlough limits job losses to below a million; if businesses can reopen and trade profitably by spring; if the government and banking industry continue to support businesses — then it may be that spending booms.
And emotionally it feels right. Who doesn’t want to get away on holiday and forget what a rubbish year this has been? Who doesn’t want to go out for a meal with their loved ones? Take their kids to the swimming pool? Who doesn’t want to treat themselves to a pair of fantastic shoes? (OK, you may not agree with me there.)
This wall of money is being seen elsewhere, too. The savings ratio has soared in Germany, France, Italy and Spain. If the households in these countries decide to splurge their savings too, this could mean a boost to exports (although of course we have Brexit lurking in the shadows).
This crisis has clearly done catastrophic damage to the nation’s finances. It has pulled the rug from underneath many small business owners. It has pushed the just-about-managing to struggling. But people want to live again. The ‘eat out to help out’ boom showed that.
We are not quite back to ‘loadsamoney’, but you get the idea.
Because you read about coronavirus
Also by Louise Cooper
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