Home Forums Watson’s Daily Chat Will it be a Merry or Thrifty Christmas?? Reply To: Will it be a Merry or Thrifty Christmas??

Yifei Zheng

Supply shortages and higher prices for essential goods like food, energy etc will probably be one of the main factors limiting retail spending. If the Bank of England responds to rising inflation by raising interest rates, that may limit the willingness of consumers to go into debt to make large gift purchases. On the other hand, I think the rise of alternative payment methods like ‘buy now pay later’ will mean that spending can still be sustained even with these higher rates. There have been several large acquisitions recently in this market, such as Paypal/Paidy and Square/Afterpay. Also, with the rise of online shopping due to lockdown, consumers have more choice in accessing cheaper products on apps such as Wish. Although the delays in shipping/supply chains may result in most people returning to the high street, particularly given the pent up demand/savings many households have accumulated over the last year.