Figures from the Bank of England indicate that the False Economy is predicted to grow steadily throughout 2007 with a larger than normal seasonal growth from the end of 2006 and into the following spring.
“Normally the boom time for the False Economy is the January sales, and whilst we expect this to continue we are also noticing an increase in pre-Christmas reductions on offer on the high street,” commented Callum Billingsworth, 19, Chief Economist with analysts Smith, Smithie and Smythe Associates. “We can therefore expect the False Economy to have two growth spurts especially in clothing and shoes retailing - as women believe they are indeed saving money by buying more expensive items than they normally would - a traditionally strong area of the false economy which has its firmest period at this time of year.”
However, reflecting the progression to a more digital economy, the false savings market is expected to show a growth in “first month free” TV, broadband and phone deals - especially those that require a 12 month contract with rebates should you exit within the first month.
“We are really expecting to see a growth in the False Economy around the broadband sector. You get what you pay for and many customers will be signing up for free deals with quite restrictive limitations on either bandwidth or monthly usage allowance,” explained Callum. “These things have some lag due to word of mouth as customers, typically 30 something males, will not wish to talk about the deals initially since they will inevitably be experiencing their first month of expensive calls to support lines during the transfer from their existing and reliable service to the new patchy supplier. However once the pain is over they will evangelise about their savings thus creating growing the broadband False Economy as they forget about the initial pain and loss of service.”
The Christmas False Economy is expected to be particularly technology led, especially in the 16 to 25 age group. “The mobile phone companies have really come on, even the basic handsets have dozens of features nobody uses once they leave the shop and the recent announcements regarding TV on your mobile is an area we think of as a massive growth in wasted expenditure,” commented Billingsworth as he demonstrated a small, jerky, blurred image that was a apparently Wayne Rooney scoring from 20 yards out. “This trend will continue into the new year. When Microsoft Vista comes out a lot of people will upgrade their PCs to more powerful ones to do exactly the same things with them that they do now.”
However the good news is not simply confined to the young and the technology sectors. Pound stores are expected to continue their steady growth in cheap kitchen utensils and handyman tools that break after the first use. The Bank of England also highlighted the recent increase in energy costs which will lead to a surge in False Economy deals for elderly customers who have only electricity, and not gas, being signed up for duel fuel savings in shopping centres up and down the land.
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