Home Business News Bank of England interest rate decision a blow for Gen Z spending

Bank of England interest rate decision a blow for Gen Z spending

21st Jun 24 7:09 am

The economic impact of high interest rates set to hit Gen Z spending for the next 12 months, prolonging the challenge for retailers and hospitality businesses as discretionary spend gets squeezed.

A survey of 2,000 consumers conducted on behalf of RSM UK shows Gen Z are increasingly concerned about the economic climate, despite signs of hardship easing.

The majority of Gen Z consumers are particularly concerned about the impact of high interest rates (84%) on their future spending, closely followed by the housing market at 82%.

The pressure on Gen Z spending is acute, with almost a third (29%) stating that they don’t have any monthly income left after paying for essentials, and almost a quarter (22%) saying they only have up to 20% left at the end of the month – demonstrating the real squeeze on finances.

However, when you compare this with the responses from all consumers, there has been a slight uptick from 47% feeling financially comfortable a year ago, to 49% in 2024.

Robyn Duffy, senior analyst at RSM UK said, the bank’s “decision to hold interest rate at 5.25% is a blow to consumers and the housing market. Gen Z in particular are suffering on this front, with house purchases feeling further out of reach than ever, and the rental market seeing increasing competition as prospective tenants bid for accommodation in some parts of the country.

“This is all taking a hit on their willingness to spend.”

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