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

58 Pages Posted: 20 May 2020

See all articles by Sinem Hacioglu Hoke

Sinem Hacioglu Hoke

Bank of England

Diego R. Känzig

London Business School - Department of Economics

Paolo Surico

London Business School

Date Written: May 2020

Abstract

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.

Keywords: Access to finance, expenditure, Income, real-time indicators

JEL Classification: D12, E21, G51

Suggested Citation

Hacioglu Hoke, Sinem and Känzig, Diego R. and Surico, Paolo, Consumption in the Time of Covid-19: Evidence from UK Transaction Data (May 2020). CEPR Discussion Paper No. DP14733, Available at SSRN: https://ssrn.com/abstract=3603964

Sinem Hacioglu Hoke (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Diego R. Känzig

London Business School - Department of Economics ( email )

Sussex Place
Regent's Park
London NW1 4SA
United Kingdom

Paolo Surico

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

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