LIVE MARKETS-"More pay": UK consumer eyes boost

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"MORE PAY": UK CONSUMER EYES BOOST

The UK consumer is poised for a decent boost in disposable income, according to Jefferies analysts.

As they put it, the emerging trend is one of "Less Work, More Pay", with their proprietary UK consumer cashflow model pointing to a 6% rise in disposable income in 2025-2026, driven by rising wages and sinking energy costs.

This trend, which follows a rise of just 1% of disposable income last year, is set to offset pressures from housing and backs their constructive view for disposable income-led growth along with their buy ratings for Tesco, Next and Sainsbury's.

The picture, however, is not all rosy.

Jefferies says the UK job market has become more muted, with the autumn budget adding to the problems, and their real-time data supporting the view that lower-skilled workers will be hit.

This means a selective approach focused on the market-share winners is warranted.

"The extent to which this worsening employment picture is anticipated by consumers... will remain a topic for debate, but our analysis of consumer trends hints that the marginal propensity to save may be slowing."

(Danilo Masoni)

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