Will we soon see an age of austerity?

Nov 5 2009 Peter Jackson, The Journal

I AM sorry, but I have to remind you – if the shops haven’t already – that Christmas is coming.

Have you been trying to hunt out presents early and beat the crowds? No, me neither.

I ask because I suspect that this year people’s Christmas shopping will take on an even greater significance than usual.

We are still in recession but there have recently been possible straws in the wind that might indicate the beginnings of recovery. According to the Halifax, for instance, house prices rose by 1.2% in October, the fourth monthly increase in a row.

However, we should not be cracking open the Champagne just yet. Retail sales in the three months to September were up by 0.9% compared to the previous quarter and up 1.8% on the year before. This is encouraging, but hardly indicates the return of boom times, particularly not as there was no growth in sales volume between August and September.

Hence the significance of our Christmas shopping. In this uncertain climate, hard-pressed retailers will be looking forward to the festive season with some trepidation and, I would guess, there will be a few retailers on whom the banks will not hesitate to pull the plug if that season disappoints.

There are also a couple of factors which should make them more worried this year than they were in 2008.

For one thing, redundancies are piling up; people are fearful for their jobs and for their futures, which will incline them to spend a little more carefully this Christmas.

Second: I think I detect a cultural change. The conspicuous consumption of the last couple of decades is giving way to an age of austerity, where high spending and flaunting of high spending are positively frowned upon. This has obviously been driven by the recession, but also perhaps by other factors, including the environment and even the MPs’ expenses scandal, or perhaps just the next phase in the great English cycle of being Cavaliers or Roundheads, with now being the turn of the Puritans.

Who knows: a government that likes banning things might even go so far as to ban mince pies.

Peter Jackson is a freelance journalist and former Journal business editor p.jackson77@btinternet.com