Sinem Hacioglu: Consumption in the Time of Covid-19: Evidence from UK Transaction-level Data

Sinem Hacioglu (Bank of England) will present 'Consumption in the Time of Covid-19: Evidence from UK Transaction-level data', with Diego Kaenzig and Paolo Surico.

 

Using transaction data from a large Fintech company, we document a decline of 40% to 50% in the spending of British households during the Covid-19 crisis. The fall is concentrated in services such as retail, restaurants and transportation. The initial rise in on-line shopping and groceries purchases has been subsequently reverted. Income reductions have become far more frequent, with a median decline around 30%. The share of borrowers facing financing issues has increased significantly for both secured and unsecured lending. Consumption and income inequality have surged, with the most economically vulnerable groups experiencing the largest percentage decline. Mortgagors and higher earners in London record the most sizable pound change.