Report shows spending power boost

A new report published by Lloyds TSB has shown a slight rise in consumers' spending power in the UK over the second quarter of this year.

There was a 0.4% year-on-year rise in discretionary spending power at the end of last month.

The Lloyds TSB Spending Power Report said that in spite of the slight improvement in spending power, consumers are still worried about their financial situation. Over half (53%) of consumers in the UK do not consider their personal financial situation to be good.

The report also showed a 3.3% increase in spending on essential goods in June. However, debt repayments declined 1.7% during the period.

According to Lloyds TSB, 13% of consumers on the tightest budgets were dipping into their savings to cover spending towards the end of June, due to soaring prices. This figure compares with 9% of consumers who raided their savings pots in May.

Patrick Foley, chief economist at Lloyds TSB, said: "If this improving trend continues then consumers' financial position will be significantly better in the second half of the year."

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