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Frugal 30-somethings ‘a drag on economy’

The UK's high street has been hit hard by the drop in consumer spending - PA
The UK's high street has been hit hard by the drop in consumer spending - PA

Lacklustre consumer spending has been driven by Britons in their 30s, fuelling fears that the UK’s stuttering start to 2018 “may not be a blip”, economists have warned.

The report by Bank of America Merrill Lynch (BAML) found a huge disconnect between the confidence in the economy of people in their 30s and their willingness to spend.

Growth slowed to 0.1pc in a weather-battered first quarter, and the poor performance could persist as the age group continues to save its money rather than spend.

Only two age groups, 31-38 and 54-plus, have become more reticent to spend in 2018, with those in their 30s suffering the sharpest fall by far.

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BAML argued that slowing house price inflation, dwindling credit and expectations of interest rate rises could be spooking the generation into a prolonged period of belt-tightening.

Britons in their 30s hold more unsecured debt than any other age group and are also most likely to be mortgage holders.