Spending Power improves in Q2

The Spending Power Report, from Lloyds TSB, indicates that household finances improved in Q2. However, an improvement is not being felt yet as household finances had previously dropped to a particularly low level.

'Discretionary spending power' grew by 0.4% in June 2011 (in real terms*). However, it had previously dropped by 2.6% at the end of 2010.

Required debt repayments dropped by 1.7% in June, but although debt repayments are falling, they're doing so at a slower rate than in previous months. The drop in debt repayments, as consumers pay down their debts andinterest rates remain low, is what's keeping 'essential spend growth' below inflation.

More: Think Money