Post by Baringa

Baringa's UK Consumer Spending Outlook: Not all consumers are created equal in this cycle. When we break down spending across household segments, a clear divide emerges between resilient and volatile consumers. In our pre-crisis view, many segments were positioned for steady recovery; particularly retired couples, young families and dual-income households. These groups benefit from stronger balance sheets and lower sensitivity to short-term shocks. But once you introduce disruption to the Strait of Hormuz, the picture fragments quickly. Under Downside 1 (3-month disruption), more elastic segments, younger renters, single earners and lower-income households, see a clear pullback in spending, while more resilient cohorts continue to support overall demand. Under Downside 2 (6-month disruption), this divergence becomes much more pronounced. The same vulnerable segments move into outright contraction, while stronger balance sheet households act as a partial buffer for the economy. The implication: This is no longer a single UK consumer story. It is a story of divergence, where exposure to income volatility, cost pressures and financial resilience determines outcomes. For businesses, this makes targeting critical. Growth will not come from the “average” consumer, but from understanding which segments remain able, and willing, to spend under pressure. Read our full report here: https://ow.ly/113i50YGuLg Patrick Winters | Caspian Conran | Jonno Stenning