The pandemic-induced lockdown forced consumers to limit the number of purchases and cut back heavily on spending. As a result, citizens of the European Union and Great Britain accumulated more than €700 billion in excess savings.
In addition, local authorities continue to provide financial aid to households. Unprecedented government support measures and high wages resulted in huge piles of consumer savings not only in Europe but also in the United States. According to Moody’s Analytics, Americans hoarded about $2.7 trillion. As a result, US personal savings surpassed the pre-pandemic level.
The gradual lifting of restrictions around the world is expected to allow consumers to revert to their old spending habits. As Europe’s economy reopens, people have already begun to actively spend the money accumulated in their accounts, experts at investment company BlackRock said. They suggest a strong rebound in spending on dining, drinking, travel, and leisure in the near future.
“We call this ‘revenge spending’ – people are thrilled to be gaining a taste of freedom, and so splurge on social occasions and discretionary items,” BlackRock noted.
Europe is already facing staff shortages in the hospitality and catering industry. The owners of restaurants in Berlin complain about the lack of personnel. In the UK, businesses are experiencing serious difficulties due to the outflow of migrants.
