Recession has left us two types of consumers

Over the course of the first six months of 2014 numerous indicators have suggested that consumers are showing an increased appetite towards spending. This follows a period in which consumer spending fell by 10% since the crisis, with retail sales having fallen by as much as 25% from the peak at one stage.

The reversal in some consumer indicators has been impressive. Consumer confidence rose to its highest since early 2007, car sales grew by 27% in the first five months of the year and retail sales volumes are growing by 6% year-on-year. Traffic volumes, an anecdotal yet important indicator of economic activity, are growing again.

Given the improvement in the labour market over the past 12 months and the stabilisation in disposable incomes, one would expect such a recovery in consumer spending.